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5)art,  ^cbaffncr  &  Jflarjc 


THE  CAUSE  AND  EXTENT  OF  THE  RECENT  INDUS- 
TRIAL PROGRESS  OF  GERMANY.    By  Earl  D.  Howard. 

THE  CAUSES  OF  THE  PANIC  OF  1893.  By  William  J. 
Lauck. 

INDUSTRIAL  EDUCATION.  By  Harlow  Stafford  Person, 
Ph.D. 

FEDERAL  REGULATION  OF  RAILWAY  RATES.  By  Al- 
bert N.  Merritt,  Ph.D. 

SHIP  SUBSIDIES.  An  Economic  Study  of  the  Policy  of  Sub- 
sidizing Merchant  Marines.     By  Walter  T.  Dunmore. 

SOCIALISM:  A  CRITICAL  ANALYSIS.     By  O.  D.  Skelton. 

INDUSTRIAL  ACCIDENTS  ANDTHEIR  COMPENSATION. 
By  Gilbert  L.  Campbell,  B.  S. 

THE  STANDARD  OF  LIVING  AMONG  THE  INDUSTRIAL 
PEOPLE  OF    AMERICA.     By   Frank  H.   Streightoff. 

THE     NAVIGABLE    RHINE.     By  Edwin  J.  Clapp. 

HISTORY  AND  ORGANIZATION  OF  CRIMINAL  STATIS- 
TICS IN  THE  UNITED  STATES.  By  Louis  Newton 
Robinson. 

SOCIAL  VALUE.     By  B.  M.  Anderson,  Jr. 

FREIGHT  CLASSIFICATION.     By  J.  F.  Strombeck. 

WATERWAYS  VERSUS  RAILWAYS.  By  Harold  Glenn 
Moulton. 

THE  VALUE  OF  ORGANIZED  SPECULATION.  By  Harri- 
son H.  Brace. 

INDUSTRIAL  EDUCATION:  ITS  PROBLEMS,  METHODS 
AND   DANGERS.     By  Albert  H.  Leake. 

THE  UNITED  STATES  INTERNAL  TAX  HISTORY  FROM 
1861   TO  1871.      By  Harry  Edwin  Smith- 

WELFARE  AS  AN  ECONOMIC  QUANTITY.  By  G.  P.  Wat- 
kins. 

CONCILIATION  AND  ARBITRATION  IN  THE  COAL  IN- 
DUSTRY IN  THE  UNITED  STATES.  By  Arthur  E.  Suf- 
fern. 

THE  CANADIAN  IRON  AND  STEEL  INDUSTRY.  By  W.  J. 
A.  Donald. 

THE  TIN   PLATE   INDUSTRY.     By  D.  E.  Dunbar. 

THE  MEANS  AND  METHODS  OF  AGRICULTURAL  EDU- 
CATION.    By  Albert  H.  Leake. 

HOUGHTON   MIFFLIN  COMPANY 
Boston  and  New  York 


I^att  ^c^affner  &  QHatx  gpvi^e  ^Bsa^B 


XIX 

THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

A  STUDY  IN  THE  ECONOMIC  HISTORY 
OF  A  PROTECTED  INDUSTRY 


THE  CANADIAN 
IRON  AND  STEEL  INDUSTRY 

A  STUDY  IN  THE  ECONOMIC  HISTORY 
OF  A  PROTECTED  INDUSTRY 


BY 

W.  J.  A.  DONALD,  Ph.D. 

McMasler  University 


^t^mtsxteVxtv^ 


BOSTON   AND   NEW   YORK 

HOUGHTON  MIFFLIN  COMPANY 

(Jtfje  nitoeriSibe  J^rejSjS  Cambriboc 

1915 


3^  £>o7 


COPYRIGHT,    I915,    BY    HART,    SCHAFFNER    &    MARX 
ALL    RIGHTS    RESERVED 

Published  September  igij 


I 


C|t)7 


PliEi^ACE 


,  This  series  of  books  owes  its  existence  to  the  generosity 
-5  of  Messrs.  Hart,  Schaffner  &  Marx,  of  Chicago,  who  have 
shown  a  special  interest  in  trying  to  draw  the  attention  of 
American  youth  to  the  study  of  economic  and  commercial 
i^  subjects.  For  this  purpose  they  have  delegated  to  the  un- 
^  dersigned  committee  the  task  of  selecting  or  approving  of 
[  topics,  making  announcements,  and  awarding  prizes  an- 
ft  nually  for  those  who  wish  to  compete. 
t^  For  the  year  ending  June  1,  1913,  there  were  offered:  — 

[y  In  Class  A,  which  included  any  American  without  re- 

striction, a  first  prize  of  $1000,  and  a  second  prize  of  $500. 
In  Class  B,  which  included  any  who  were  at  the  time 
undergraduates  of  an  American  college,  a  first  prize  of 
$300,  and  a  second  prize  of  $200. 

Any  essay  submitted  in  Class  B,  if  deemed  of  sufficient 
merit,  could  receive  a  prize  in  Class  A. 

The  present  volume,  submitted  in  Class  A,  was  awarded 
honorable  mention  in  that  class. 

J.  Laurence  Laughlin,  Chairman, 

University  of  Chicago. 
J.  B.  Clark, 

Columbia  University. 
Henry  C.  Adams, 

University  of  Michigan. 
Horace  White, 

New  York  City. 
Edwin  F.  Gay, 

Harvard  University. 


AUTHOR'S  PREFACE 

This  book  is  an  attempt  to  study  the  economic  history 
and  problems  of  a  particular  Canadian  industry.  It  was 
undertaken  in  a  twofold  belief.  In  the  first  place,  the  gen- 
eral economic  history  of  Canada  can  never  be  thoroughly 
understood  or  properly  written  until  a  number  of  studies, 
similar  to  the  one  at  hand,  provide  the  detailed  basis  for 
general  conclusions.  Wanting  the  detailed  studies  of  par- 
ticular phases,  those  who  have  written  on  general  economic 
history,  heretofore,  have  emphasized  the  obvious  features, 
namely,  the  political  incidents  and  problems.  It  is  to  be 
hoped  that  we  may  soon  have  other  studies  of  this  kind 
contributing  to  the  knowledge  of  the  general  economic  his- 
tory of  Canada. 

In  the  second  place,  the  writer  was  interested  in  what 
has  been,  and  may  soon  become  again,  a  serious  contro- 
versial problem  in  Canada,  namely,  the  relation  of  protec- 
tion to  the  growth  of  the  Canadian  iron  and  steel  industry. 
At  the  same  time,  he  realized  the  difficulty  of  treating  such 
a  controversial  political  problem  impartially.  To  avoid  dis- 
cussing the  topic  in  a  partisan  manner  and  to  present  a 
treatment  that  would  command  impartial  reading  was 
essential.  One  method  suggested  itself,  and  that  method 
fitted  into  what  became  the  main  purpose  of  the  book. 
The  writer  hopes  that  by  making  the  economic  history  of 
a  protected  industry  the  main  theme  of  the  book,  and  by 
treating  the  controversial  topic  as  of  secondary  import- 
ance, two  purposes  have  been  fulfilled.  The  economic  his- 
tory of  the  industry  should  contribute,  not  only  to  an  un- 
derstanding of  the  general  economic  history  of  Canada,  but 
also  to  the  solution  of  the  controverted  question;  and  by 
treating  the  controversy  respecting  protection  to  the  iron 


viii  AUTHOR'S  PREFACE 

and  steel  industry  in  Canada  as  of  secondary  importance, 
it  has  been  given  more  impartial  consideration,  perhaps, 
than  it  might  otherwise  have  received. 

Whether  the  history  of  this  industry  has  been  scienti- 
fically treated,  the  reader  is  left  to  judge.  The  success  of  the 
method  of  discussing  the  protective  policy  is  partly  dem- 
onstrated by  the  fact  that  on  two  important  points  the 
writer  was  forced  to  change  his  views.  Starting  out  with 
an  opinion  commonly  accepted  in  Canada  that  the  suc- 
cess of  the  primary  iron  and  steel  industry  was  largely  due 
to  the  bounty  system,  the  writer  reached  the  conclusion 
that  the  greater  part  of  the  primary  industry  would  have 
grown  up  whether  or  not  protection  in  the  form  of  bounties 
had  been  given.  On  the  other  hand,  the  writer  now  be- 
lieves that  tariff  protection  did  have  a  stimulating  effect 
on  certain  branches  of  the  finishing  industry.  Thus  the 
method  adopted  has  at  least  succeeded  in  modifying  the 
views  of  the  author.  If  the  discussion  of  the  controversial 
problem  receives  the  impartial  attention  of  the  reader,  the 
wisdom  of  this  method  of  treating  politico-economic  prob- 
lems may  seem  amply  proved. 

The  writer  feels  deeply  indebted  to  Professor  Chester 
Whitney  Wright  of  the  University  of  Chicago  for  much 
encouragement  and  guidance  in  the  preparation  of  this 
book,  and  to  Mr.  Vincent  Basevi  of  the  Toronto  Bureau 
of  Municipal  Research  for  assistance  in  the  revision  of  the 
manuscript. 

W.  J.  A.  Donald. 

McMaster  University, 
September,  191  i. 


CONTENTS 

PART  ONE 

Introduction:  The  Economic  Background 

CHAPTER  I 

The  Industrial  Development  of  Canada 

§     1.  Introduction 3 

§     2.  The  lateness  of  Canadian  industrial  development       ...  4 

§     3.  The  French  regime 5 

§     4.  The  provincial  period 6 

§     5.  The  first  period  of  Confederation 13 

§     6.  Prosperity  in  the  twentieth  century 16 

§     7.  The  iron  and  steel  industry 18 

CHAPTER  II 

Natural  Resources  of  the  Canadian  Iron  and  Steel 
Industry 

§     1.  General  factors  influencing  the  availability  of  natural   re- 
sources        20 

§     2.  The  cost  of  mining 21 

§     3.  The  cost  of  transportation  to  the  furnace;  distance  from  fuel  .  21 

§     4.  The  character  of  the  ore  itself 23 

§     5.  The  question  of  ownership 23 

§     6.  Canadian  resources,  in  general 25 

§     7.  The  iron  ore  deposits  of  Nova  Scotia 25 

§     8.  Favorable  conditions  of  the  Nova  Scotia  industry      ...  27 

§     9.  The  ores  of  New  Brunswick  and  Newfoundland         ...  29 

§  10.  Natural  resources  of  Quebec 30 

§  11.  Ontario's  vast  deposits  of  iron  ores 31 

§  12.  The  coal  problem 33 

§  13.  Iron  ores  of  the  Northland;  Labrador  and  Ungava     ...  34 

§  14.  British  Columbia's  iron  ore  and  coal  deposits       ....  35 

§  15.  The  impossibility  of  estimating  Canada's  resources    ...  36 


CONTENTS 


PART  TWO 

The  Iron  Industry  of  Canada  prior  to  the 
Adoption  of  the  National  Policy  in  1879 

CHAPTER  ni 

The  History  of  the  Industry 

§  1.  The  tardy  development  of  the  industry 41 

§  2.  The  early  iron  industry  of  the  Province  of  Quebec     ...  41 

§  3.  First  attempts  in  Ontario 49 

§  4.  The  iron  industry  of  the  Maritime  Provinces       ....  55 

§  5.  The  manufacture  of  finished  products 59 

§  6.  A  summary  of  progress 63 

CHAPTER  IV 

Elements  of  Success  and  Failure 

§     1.  A  statement  of  the  problem 64 

§     2.  The  revenue  tariff 64 

§     3.  The  influence  of  iron  ores 68 

§     4.  The  supply  of  fuel 70 

§     5.  Transportation  facilities 71 

§     6.  Labor  and  management 72 

§     7.  Lack  of  capital 73 

§     8.  Prices 73 

§     9.  The  limited  market 74 

§  10.  A  summary  and  conclusion 77 

PART  THREE 

The  Canadian  Iron  and  Steel  Industry 
1879  TO   1897 

CHAPTER  V 

The  Tariff  and  Bounty  System 

§     1.  The  trend  toward  protection 83 

§     2.  The  tariff  and  bounties  from  1879  to  1887 84 

§     3.  The  revision  of  1887;  changes  up  to  1894 86 


CONTENTS  xi 

4.  The  tariff  and  bounties  of  1894 88 

5.  Provincial  and  municipal  largesse 89 

6.  Arguments  for  protection 90 

7.  The  tariff  and  prices 94 

8.  Specific  versus  ad  valorem  duties 96 

9.  The  tariff  and  importation  of  iron  and  steel  goods      ...  97 

10.  Opposition  to  duties  on  pig  iron,  bar  iron,  and  scrap  iron       .     98 

11.  The  bounty  system;  its  genesis  and  effects 102 

12.  A  summary 104 


CHAPTER  VI 

The  Development  of  the  Industry 

1.  The  iron  industry  at  Londonderry,  Nova  Scotia         .       .       .  106 

2.  Success  in  Quebec 108 

3.  The  growth  of  "Scotia" Ill 

4.  The  revival  in  Ontario 114 

5.  Unsuccessful  attempts 115 

6.  The  rolling  mill  and  finishing  industry 118 

7.  The  factors  of  failure  or  success 120 

8.  The  tariff  and  the  bounties:  a  conclusion 124 

9.  Summary 127 


PART  FOUR 

The  Canadian  Iron  and  Steel  Industry 
1897  TO  1914 

CHAPTER  VII 

The  General  History  of  the  Tariff  and  Bounty 

System 

§     1.  The  situation  in  1896 131 

§     2.  The  Tariff  Revision  of  1897 132 

§     3.  The  Bounty  Act  of  1897 134 

§     4.  The  Bounty  Act  of  1899 138 

§     5.  The  Bounty  Act  of  1903 141 

§     6.  The  Tariff  Revision  of  1906 145 

§     7.  The  Bounty  Act  of  1906 147 

§     8.  The  passing  of  the  bounty  system 153 

§  9.  The  bounty  system;  an  estimate  and  conclusion         .       .       .  154 

§  10.  Tariff  revision  since  1906 158 


xii  CONTENTS 

CHAPTER  Vni 

Various  Features  of  Tariff  and  Bounty  Legislation 

§    1.  The  British  preference 162 

§    2.  The  drawback  system 167 

§    3.  Municipal  subsidies  and  Tax  exemption 170 

§    4.   Provincial  Assistance 172 

§    5.  The  RaUway  Act  173 

§    6.  The  Clergue  rail  contract 174 

§    7.  The  steel  rail  duty 175 

§    8.  The  dumping  clause 182 

§    9.  The  amount  of  protection  granted 187 

CHAPTER  IX 

The  Recent  History  of  the  Industry 

§    1.  Commercial  policy  and  industrial  progress 190 

§    2.  A  general  statistical  statement  of  progress 191 

§    3.  The  Nova  Scotia  Steel  and  Coal  Company 194 

§    4.  The  steel  industry  at  Sydney;  the  Dominion  Iron  and  Steel 

Company 200 

§    5.  The  Sault  Ste.  Marie  industries;  the  Lake  Superior  Corpora- 
tion       212 

§    6.  The  Hamilton  steel  plant  and  allied  interests;  the  Steel  Com- 
pany of  Canada 219 

§    7.  The  Drummond  interest;  the  Canada  Iron  Corporation   .       .  222 
§    8.  The  Canadian  Steel  Foundries,  at  Welland  and  Montreal       .  227 
§    9.  MacKenzie  and  Mann  interests;  the  Atikokan  Iron  Company  228 
§  10.  The  Deseronto  charcoal  furnace;  the  Standard  Iron  Com- 
pany    231 

§  11.  Ferro-products,  and  the  electric  steel  industry      ....  232 

§  12.  British  Columbia  operations  and  prospects 234 

§  13.  The  United  States  Steel  Corporation 235 

§  14.  Miscellaneous  enterprises 236 

§  15.  A  survey  of  progress 241 

CHAPTER  X 

The  Combination  Movement 

§    1.  Introduction;  discussion 244 

§    2.  Associations  and  agreements 244 

§    3.  Combination  of  competing  companies;  the  Steel  Company  of 

Canada 249 

§    4.  Integration  of  industry;  the  Nova  Scotia  Steel  and  Coal  Company  254 


CONTENTS  xiii 

§    5.  Controlof  a  coal  supply;  the  Dominion  Steel  Corporation  .       .  256 

§    6.  Exaggerated  integration;  the  Lake  Superior  Corporation  .       .  266 

§    7.  Community  of  interest;  the  Canada  Iron  Corporation       .       .  268 
§    8.  The  car-building  industry  and  steel  castings;  the  Canada  Car 

and  Foundry  Company  and  Canadian  Steel  Foundries  .       .  269 
§    9.  The  United  States  Steel  Corporation  in  Canada  .       .       .       .271 

§  10.  Predictions  and  discussions 273 

§  11.  The  character  of  the  combination  movement        ....  275 

§  12.  Interlocking  directorates 278 

§  13.  An  estimate  of  the  extent  of  the  combination  movement  .       .  281 

§  14.  Protection  and  combinations 284 

CHAPTER  XI 

The  Causes  of  Recent  Progress 

§    1.  Introduction 287 

§    2.  The  importance  of  resources 287 

§    3.  Favorable  technical  conditions 290 

§    4.  The  Canadian  market 293 

§    5.  Industrial  organization 294 

§    6.  Other  conditions 297 

§    7.  The  position  of  the  Canadian  industry 298 

§    8.  The  influence  of  protection 299 

CHAPTER  XII 
Conclusion 

§    1.  A  review 308 

§    2.  Cheap  iron  and  steel 311 

§    3.  A  proposal 313 

§    4.  The  end  of  the  bounties 317 

§    5.  Protective  inconsistencies 319 

§    6.  The  plurality  of  interrelated  causes 321 

APPENDIX 

A.  The  statistical  progress  of  Canada;  estimated  population,  miles 

of  railway  in  operation,  increase  of  railway  mileage,  gross  lia- 
bilities of  commercial  failures,  total  imports  and  exports  .       .  325 

B.  The  production  of  iron  and  steel  in  Canada:  — 

Table  I.  Pig  iron  produced  in  Canada  from  Canadian  and  from 
foreign  ore,  totals:  Pig  iron,  kentledge,  and  cast  scrap 
iron  imported  for  home  consmnption ;  the  total  con- 
sumption; and  the  percentage  of  Canadian  output  to 

the  total  consumption,  since  1883 326 


xiv  CONTENTS 

Table  II.  Annual  production  of  pig  iron  by  Provinces  since  1886  327 
Table  III.  Annual  production  of  iron  ore  by  Provinces  since  1885  328 
Table  IV.  Iron  ore  and  fuel  charged  to  furnaces  since  1886  .  .  329 
Table    V.  Production  of  pig  iron  in  Great  Britain,  the  United 

States,  and  the  total  world  production  ....  330 
Table  VI.  The  Production  of  steel  ingots  and  castings  in  calen- 
dar years,  and  the  imports  of  steel  ingots  and  billets 
in  fiscal  years 331 

C.  The  output  of  iron  and  steel  products  in  census  years:  — 
Table      I.  Number  of  establishments  of  certain  kinds  and  value 

of  the  products.  Decennial  figures,  1871-1911  .  .332 
Table  II.  Number  of  establishments  employing  five  employ- 
ees and  more;  value  of  the  capital  invested;  amount 
of  salaries  and  wages,  and  values  of  the  products,  to- 
gether with  percentage  increases  for  decennial  years, 
1891-1911 333 

D.  Rates  of  bounty  in  dollars  per  ton  on  various  iron  and  steel 

products  by  classes  and  by  years  —  1884-1912     ....  334 

E.  Bounties  paid  on  iron  and  steel  products,  1884-1912     .       .       .  335 

F.  Rates  of  duty:  — 

Table     I.  Rates  of  duty  on  certain  iron  and  steel  imports, 

1845-1914 336 

Table    II.  Acts  affecting  the  customs  rates  on  certain  iron  and 

steel  products,  1845-1914 337 

G.  Exports  and  imports  of  iron  and  steel:  — 

Table     I.  Exports  by  years 338 

Table  II.  Imports  of  iron  and  steel  and  manufactures  thereof, 
dutiable  and  free,  from  Great  Britain,  United  States, 
and  other  countries,  by  years,  1874-1914      .       .       .  339 

Table  III.  Value  of  imports  of  pig  iron,  wrought  scrap  iron,  steel 
billets,  etc.,  and  of  ferro-products,  by  years,  1888- 
1914 341 

Table   IV.  Value  of  imports  of  steel  rails,  wire  rods,  bar  iron 

and  steel,  and  structural  steel,  by  years,  1885-1914  .  342 

H.  American  prices  of  certain  iron  and  steel  products,  by  years, 

1860-1912 343 

I.  The  combination  movement  in  the  Canadian  iron  and  steel  in- 
dustry :  — 

Table      I.  Amalgamations 344 

Table    II.  Chart  showing  interlocking  directorates,  1912    .       .  346 


CONTENTS  XV 

J.    Tariff  Memorials:  — 

I.  Presented  to  Finance  Minister,  November  21,  1911        .       .  347 
II.  Anonymous 353 

K.  Maps:  — 

I.  General  map  of  Canada opposite  page  355 

II.  Map  of  the  Maritime  Provinces      .      .      .      opposite  page  357 

BIBLIOGRAPHY 357 

INDEX 367 


THE  CANADIAN 
IRON  AND  STEEL   INDUSTRY 

PART  ONE 

INTRODUCTION:  THE  ECONOMIC 
BACKGROUND 


THE  CANADIAN 
IRON  AND  STEEL  INDUSTRY 

CHAPTER  I 

THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA 

§  1.  Canadian  industrial  history  cannot  be  properly 
written  imtil  detailed  studies  of  all  the  important  phases  of 
development  are  available.  While  a  few  such  problems  as 
banking  and  tariff  history  have  been  more  or  less  carefully 
treated,  the  number  of  such  studies  is  altogether  too  small 
for  a  proper  understanding  of  Canadian  industrial  develop- 
ment as  a  whole.  The  purpose  of  this  book  is,  in  part,  to 
add  to  the  available  material  by  tracing  the  development 
of  a  particular  industry. 

Among  the  various  industries  which  might  thus  be  taken 
up,  the  manufacture  of  iron  and  steel  has  seemed  to  be  the 
most  important.  Those  countries  which  have  undergone 
the  greatest  economic  development  produce  the  most  iron 
and  steel.  Great  Britain,  the  United  States,  and  Germany 
lead  in  this  important  industry  as  in  industrial  develop- 
ment in  general.  Canada,  on  the  other  hand,  which  has  not 
progressed  until  recently,  is  far  behind  her  neighbor,  the 
United  States,  in  the  development  of  her  iron  and  steel 
industry.  Hence  it  is  that  a  study  of  the  economic  history 
of  the  Canadian  iron  and  steel  industry  ought  to  contribute 
very  largely  to  the  understanding  of  the  general  economic 
history  of  Canada. 

In  order  to  understand  the  history  of  a  particular  indus- 
try, it  is  necessary  to  know  something  of  the  general  eco- 
nomic background  in  the  various  periods  of  its  history. 
This  is  especially  true  in  the  case  of  the  iron  and  steel 


4    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

industry,  which  is  frequently  spoken  of  as  a  barometer  of 
general  trade  conditions;  an  expression  obviously  implying 
that  its  developments  and  periods  of  prosperity  or  depres- 
sion are  largely  determined  by  the  general  industrial  con- 
dition of  the  country.  It  is  evident,  therefore,  that  some 
knowledge  of  the  background  of  Canadian  industrial  his- 
tory and  the  forces  hastening  or  retarding  the  country's 
economic  development  will  be  essential  to  an  understanding 
of  our  subject. 

Furthermore,  the  iron  and  steel  industry  cannot  prosper 
without  the  advantages  of  favorable  natural  conditions  for 
the  supply  of  raw  materials.  Coal,  ore,  and  fluxing  mate- 
rials must  be  obtainable  so  that  they  may  be  cheaply 
assembled  at  or  near  the  market  for  iron  and  steel.  It  thus 
becomes  necessary  to  add  to  our  background  of  industrial 
history  a  survey  of  the  natm-al  resources  in  Canada  and  the 
conditions  under  which  they  have  been  available. 

To  determine  what  part  protection  has  had  in  the  devel- 
opment of  the  Canadian  iron  and  steel  industry  is  a  second 
purpose  of  our  study,  but  in  this,  also,  the  background  is 
essential,  for  the  application  of  the  national  policy  of  pro- 
tection to  the  iron  and  steel  industry  reflects  general  eco- 
nomic conditions.  For  these  reasons,  then.  Part  One  of  our 
study  treats  of  the  various  factors  in  the  industrial  develop- 
ment of  Canada  in  different  periods,  together  with  the 
natural  resources  of  the  Canadian  iron  and  steel  industry. 

§  2.  Canada  has  not  yet  undergone  a  great  expansion  of 
industry  commensurate  with  that  found  in  the  United 
States.  Indeed,  a  prominent  feature  of  Canadian  history  is 
the  relative  lateness  of  the  country's  economic  develop- 
ment as  compared  with  that  of  her  southern  neighbor. 
While  the  population  of  the  United  States  was  rapidly 
increasing,  that  of  Canada  long  remained  almost  station- 
ary. The  expansion  of  railway  systems  in  western  Canada 
is  coming  from  three  to  five  decades  later  than  it  did  in 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    5 

southern  latitudes.  In  many  other  respects,  the  United 
States  has  progressed  much  more  rapidly  than  Canada. 
This  is  true  of  manufactures  and  of  the  manufacture  of 
iron  and  steel  in  particular. 

In  Canada,  however,  since  Confederation,  and  especially 
since  1897  or  1900,  wonderful  progress  has  been  achieved. 
Compared  with  economic  organization  in  the  French 
regime,  which  lasted  until  1760,  and  in  the  provincial 
period  which  lasted  until  Confederation  in  1867,  the  eco- 
nomic life  of  the  last  twenty  or  thirty  years  of  the  nine- 
teenth century  and  during  the  twentieth  century  was 
marked  by  extraordinary  progress.  The  conditions  and 
factors  of  the  economic  life  of  these  four  main  periods  of 
Canadian  history  will  now  receive  our  attention. 

§  3.  In  the  period  of  French  control,  which  lasted  until 
1760,  is  found  a  typical  mercantile  colonial  policy  degen- 
erated into  colonial  misgovernment.  Colonization  was 
almost  a  failure.  Trading  companies  purchased  the  exclu- 
sive privileges  of  the  fur  trade  with  promises  of  settlement 
and  colonization,  which  were  if  possible  entirely  disregarded 
and  were  in  any  case  rarely  properly  carried  out.  Fishing 
and  the  fur  trade,  which  received  chief  attention,  did  not 
require  permanent  economic  organization.  Agriculture 
lagged  under  a  seigneurial  system  transported  from  France. 
Industry  was  practically  undeveloped,  and  colonial  trading 
and  commerce  were  entirely  subservient  to  French  trading 
interests.  The  mother  country,  with  little  thought  of  the 
future,  regarded  New  France,  its  natives  and  resources,  as 
a  legitimate  field  for  immediate  economic  exploitation. 
To  make  matters  worse,  the  administrators  were  often 
inefficient,  and  preyed  on  the  colonists  or  any  industrial 
undertaking,  such  as  the  Government  iron  forges,  to  fill 
their  own  private  coffers. 

The  results  of  French  colonization  methods  became  pain- 
fully obvious  after  the  Peace  of  Paris,  in  1763,  when 


6    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Canada  passed  finally  into  the  hands  of  the  British.  Many 
of  the  French  noblesse  moved  back  to  the  homeland,  leaving 
in  Canada  only  the  habitants,  with  their  primitive  social 
customs,  lack  of  initiative,  poor  educational  system,  and 
restricted  local  interests;  conditions  which  even  to-day  are 
being  modified  only  slowly. 

To  the  disadvantages  of  the  French  colonial  policy  must 
be  added  the  climatic  conditions  of  Canada,  which  have 
probably  retarded  the  development  of  the  country  more 
than  any  other  single  factor.  As  the  isothermal  lines 
roughly  follow  the  southern  shores  of  the  Great  Lakes, 
what  is  now  Ontario  is  almost  as  cold  as  the  most  northerly 
limits  of  the  United  States.  Furthermore,  the  rivers  and 
lakes,  which  were  an  important  means  of  transportation  in 
early  years,  were  useless  for  five  or  six  months  of  the  year. 
The  ice  on  the  St.  Lawrence  River,  which  was  the  sole  out- 
let for  the  produce  of  Canada  during  the  French  regime, 
closed  navigation  for  a  great  part  of  the  year.  It  is  easy, 
then,  to  understand  how  the  settlement  of  territory  now 
comprising  Ontario  was  so  handicapped  as  to  be  prac- 
tically impossible  during  the  French  regime. 

It  is  not  surprising,  therefore,  that,  when  in  1763  England 
secured  control  of  the  French  colonies  in  America,  the  pop- 
ulation of  Canada  was  less  than  70,000  as  compared  with  a 
population  of  over  3,000,000  in  the  English-speaking  colo- 
nies to  the  south. ^  Industry  and  agriculture  were  carried 
on  under  most  unfavorable  circumstances,  and  trade  was 
conducted  under  a  system  of  exploitation  by  trading 
companies  authorized  by  the  mother  country. 

§  4.  Unfortunately,  the  transition  to  British  control 
failed,  in  many  respects,  to  bring  with  it  immediate  redress. 
It  merely  ushered  in  the  provincial  period  dating  from  1760 
to  1867.  The  history  of  this  period  differs  from  the  French 

^  W.  J.  A.  Donald,  "The  Growth  and  Distribution  of  the  Canadian 
Population,"  Journal  of  Political  Economy,  vol.  xxi,  p.  297. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    7 

regime  largely  in  that  trade,  commerce,  and  commercial 
policy  were  linked  with  British  rather  than  French  insti- 
tutions at  a  time  when  British  industrial  supremacy  was 
rapidly  gaining  ground.  It  was  provincial  in  that  each 
Province  controlled  its  own  affairs  subject  to  the  approval 
of  the  British  Parliament.  Upper  and  Lower  Canada  ^  were 
given  separate  political  institutions.  Acadia,^  secured  by 
England  in  1713,  had  its  own  separate  political  and  eco- 
nomic life.  Whereas  the  Federal  Government  of  the 
United  States  was  able  to  develop  some  uniformity  of 
economic  policy  according  to  methods  prescribed  by  the 
Constitution,  it  was  not  until  the  passing  of  the  Act  of 
Union,  in  1841,  that  any  unity  of  action  and  interest  was 
made  possible  in  Canada,  and  what  was  secured  at  that 
time  applied  only  to  the  two  Provinces  of  Upper  and  Lower 
Canada.  Even  then,  provincial  interests  were  often  pre- 
dominant. The  larger  national  point  of  view  was  forgotten 
in  the  heat  of  party  strife  or  checked  by  the  conservatism 
of  the  French-Canadian  element. 

Connected  with  the  provincial  and  local  spirit  of  these 
early  days  was  the  Canadian  race  question,  which  is  still 
an  important  factor  in  Canadian  life  and  politics.  The 
great  body  of  the  population  of  Quebec  is  composed  of 
people  different  from  the  rest  of  the  Canadians  in  blood 
and  temperament,  in  language  and  customs,  in  religion  and 
education,  and  in  ideals  and  traditions.  This  was  one  reason 
for  giving  Upper  and  Lower  Canada  different  political  insti- 
tutions; but,  even  after  the  Act  of  Union,  the  race  question 
so  permeated  the  political  world  as  to  unfit  legislators' 
minds  for  calm  and  unprejudiced  consideration  of  the  more 
fundamental  questions  of  the  economic  development  of  the 
country.  The  French-Canadian  element  more  than  once 
prevented  the  passing  of  legislation  which  would  have 
aided  the  advancement  of  the  English  Pro\'ince.  For  in- 
stance, as  late  as  1865,  the  deepening  and  improvement  of 

*  Now  Ontario  and  Quebec.  *  Now  the  Maritime  Provinces.    , 


8  THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  Lachine  Canals  on  the  Upper  St.  Lawrence  was  opposed 
because  it  was  calculated  to  benefit  Upper  rather  than 
Lower  Canada.^ 

The  geographical  features  of  the  country,  too,  had  much 
to  do  with  the  political  and  economic  development  of 
Canada.  The  Maritime  Provinces  were,  and  still  are,  shut 
off  from  the  Central  Provinces  by  the  projection  of  New 
England  into  what  would  naturally  seem  Canadian  terri- 
tory. As  this  disadvantage  still  exists,  the  Maritime 
Provinces  have  retained  a  certain  feeling  of  isolation,  and 
the  Central  and  Western  Provinces  have  an  unfortunate 
lack  of  interest  in  the  Eastern  Provinces.  Upper  Canada, 
now  Ontario,  extending  as  it  did  south  and  west  into  the 
northern  part  of  the  United  States,  was  partially  shut  off 
from  the  foreign  trade  by  a  combination  of  misfortunes. 
The  exportation  of  her  produce  to  the  growing  market  in 
the  North  Central  States  was  limited  by  the  various  tariffs 
imposed  from  time  to  time  by  the  United  States  Govern- 
ment. Forced  thus  to  turn  eastward  for  an  outlet  for  her 
produce,  the  disadvantage  of  distance  from  European 
markets  was  augmented  by  the  fact  that  her  products 
were  for  several  months  of  every  year  closed  in  by  the  ice 
of  the  St.  Lawrence  and  the  Great  Lakes.  Lower  Canada, 
on  the  other  hand,  was  in  a  position  to  control  the  export 
and  import  trade,  and  it  exercised  this  power  to  the  extent 
of  making  a  bargain  by  which,  according  to  the  Act  of 
Union,  it  paid  to  Upper  Canada  only  a  small  portion  of  the 
customs  duties,  and  thus  virtually  placed  a  toll  on  the 
production  and  consumption  of  Upper  Canada. 

Likewise,  the  westward  movement,  which  played  such 
an  important  role  in  the  development  of  the  United  States 
from  the  War  of  1812  to  recent  years,  was  long  retarded  in 
Canada  by  geographical  conditions.  In  the  earlier  years, 
the  natural  route  of  western  migration  was  along  the  water- 

1  G.  V.  Cousins,  "Early  Transportation  in  Canada,"  University  Maga- 
zine,  December,  1907,  p.  507. 


THE  INDUSTRIAL  DEVELOPJ^IENT  OF  CANADA    9 

ways.  In  Canada  it  followed  the  northern  shores  of  Lakes 
Ontario  and  Erie.  When  the  western  movement  in  the 
United  States  was  reaching  the  Mississippi  Valley,  Ca- 
nadian migration,  instead  of  following  the  northern  shores 
of  Lakes  Huron  and  Superior,  moved  through  Michigan 
into  the  United  States  and  thus  helped  in  the  building-up 
of  the  great  American  West. 

Doubtless  this  movement  of  population  was  affected  by 
the  climatic  condition  of  the  country.  The  rigor  of  the 
Canadian  winter  was  sufficient  to  drive  the  majority  of 
European  emigrants  to  the  United  States  where  opportuni- 
ties were  quite  as  great  as  in  Canada  and  the  results  obtain- 
able with  less  sacrifice.  Indeed,  for  a  long  period  there  was 
a  constant  drain  on  the  population  of  Canada  through  the 
emigration  of  many  people  to  what  seemed  a  country  of 
greater  and  more  immediate  opportunity. 

The  potential  agricultural,  mineral,  and  forest  wealth  of 
a  country  cannot  be  exploited  until  adequate  transporta- 
tion is  available,  and  Canada  was  not  oversupplied  with 
this  important  asset.  Here  again,  geographical  features 
and  climatic  conditions  were  important.  Canada  has,  of 
course,  an  abundance  of  waterways,  which  are  a  great  nat- 
ural advantage  when  properly  improved  and  used.  Since 
Halifax  and  St.  John,  which  have  excellent  harbors,  were 
too  far  distant  from  Ontario  to  provide  an  outlet  for  bulky 
produce,  especially  during  the  pre-railway  era,  the  St. 
Lawrence  River  became  the  main  outlet  for  Ontario's 
products.  Nature,  however,  placed  many  obstacles  in  the 
way  of  navigation  on  the  St.  Lawrence,  and  these  had  to 
be  overcome  by  the  expenditure  of  many  millions  of  dol- 
lars. To  put  Montreal  at  the  head  of  navigation  was  no 
small  task.  As  the  St.  Lawrence  was  extremely  shallow  at 
many  points  between  Quebec  and  Montreal,  vessels  draw- 
ing more  than  ten  or  twelve  feet  of  water  were  unable  to 
reach  Montreal  during  a  large  part  of  the  na\"igation  sea- 
son.    As  early  as  1826   the  deepening   of   the   channel 


10    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

was  proposed,  but  dredging  operations  were  not  started 
until  eighteen  years  later.  Besides  these  river  improve- 
ments, it  was  necessary  to  build  canals  to  provide  a  route 
by  which  the  falls  at  Niagara  and  the  rapids  of  the  Upper 
St.  Lawrence  River  might  be  avoided.  Even  with  these 
improvements  the  results  were  only  partially  satisfactory, 
for  during  the  winter  months  the  St.  Lawrence  was  ice- 
bound and  traffic  was  forced  into  other  channels.  In  the 
mean  time,  however,  the  Erie  Canal  and  the  railways  of 
the  Eastern  States  had  attracted  to  New  York  the  great 
bulk  of  the  traffic  from  Canada  to  Europe. 

Since  water  transportation  was  restricted  to  the  open 
months,  railway  and  other  land  transportation  facilities 
were  most  important  for  internal  development.  A  study 
of  rates  in  force  before  the  railway  era  reveals  the  ineffi- 
ciency of  the  facilities  provided.  Before  1812,  when  it  cost 
$7  to  ship  a  ton  of  freight  from  Liverpool  to  Montreal,  the 
rates  from  Montreal  to  the  upper  end  of  Lake  Ontario 
varied  from  $20  to  $27  a  ton.  High  rates,  of  course,  pre- 
vented the  movement  of  traffic,  and  thus  retarded  the 
economic  development  of  the  country.^ 

The  condition  of  roads  in  Canada  was  deplorable;  and, 
in  1770,  Carleton,  the  Governor,  was  compelled  to  enforce 
the  individual  responsibility  of  proprietors  and  tenants  to 
keep  the  post  roads  in  repair.  Owing  to  the  resistance  of 
the  French-Canadians  to  enforced  labor,  it  was  not  until 
Sydenham's  time,  from  1839  to  1841,  that  much  improve- 
ment was  effected.  Since  the  Canadian  winter  with  its 
frost  and  snow  gave  a  firm,  smooth  road  for  heavy  loads, 
winter  roads  were  very  important.  For  many  years  they 
were  used  almost  exclusively  for  all  traffic  that  could  not 
be  shipped  by  water  during  the  season  of  navigation.  Cor- 
duroy roads  and  turnpikes  were  common,  but  the  corduroy 
roads,  at  their  best  a  wretched  means  of  transportation, 
were  usually  in  a  poor  state  of  repair.  In  Upper  Canada, 
*  Cousins,  op.  dt.,  p.  611. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    11 

especially,  the  turnpikes  were  controlled  by  joint-stock 
companies  which  not  only  charged  excessive  tolls,  but  faUed 
to  keep  the  roads  in  good  condition.  Later,  the  Govern- 
ment took  charge  of  this  public  service,  maintaining  its 
control  until  1841,  when  it  seemed  advisable  to  place  the 
roads  under  the  control  of  the  municipalities.^ 

The  value  of  the  railway  was  not  quickly  realized  in 
Canada,  for  it  was  expected  that  waterways  would  be 
sufficient  for  internal  transportation.  Consequently,  enor- 
mous sums  of  money  were  expended  on  canals,  even  after 
1840,  when  the  superiority  of  the  railroad  had  already 
been  proved  in  England  and  in  the  United  States.  Can- 
ada's delay  in  adopting  the  railway  was,  of  course,  partly 
due  to  the  fact  that  traffic  was  limited  in  amount,  and 
partly  due  to  the  fact  that  waterways  did  supply  a  great 
deal  of  the  demand.  Yet,  even  after  the  value  of  the  rail- 
way was  recognized  and  railway  construction  had  begun, 
geographical  features  deterred  rapid  expansion  of  the  rail- 
way net.  The  forbidding  nature  of  the  country  to  the  north 
of  Lakes  Huron  and  Superior  for  many  years  proved  a 
barrier  to  transportation  to  the  west.  The  rocks  and  for- 
ests of  the  Ontario  highlands  and  of  the  Rocky  Mountains 
were  obstacles  greater  than  railway  building  was  at  that 
time  willing  to  surmount.  Furthermore,  this  section  of  the 
country  did  not  offer  any  prospects  of  a  profitable  traffic  in 
the  immediate  future.  While  the  Grand  Trunk,  with  both 
terminals  in  the  United  States,  reached  Chicago  in  the 
early  seventies,  the  building  of  a  national  transcontinental 
railway  in  Canada  was  only  a  mooted  question,  until  in 
the  eighties  British  Columbia's  unqualified  demands  for  a 
railway  to  unite  her  to  the  Eastern  and  Western  Provinces 
forced  the  building,  at  whatever  cost,  of  the  Canadian 
Pacific  Railroad. 

Other  conditions,  too,  were  backward.  Agricultural 
methods  were,  of  course,  primitive,  especially  in  Quebec, 
^  Gjusins,  op.  cit.,  pp.  613-15. 


12    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

where  the  French  clung  to  old  methods.  It  is  scarcely 
necessary  to  add  that  the  climate  limited  the  agricultural 
area,  and  prevented  the  culture  of  certain  kinds  of  produce. 
The  climate  of  the  Northland  together  with  geographical 
features  prevented  the  development  of  agriculture  in  West- 
em  Canada.  Had  Western  Canada  been  able  to  ship  prod- 
uce to  England  via  Hudson's  Bay,  Canadian  economic  de- 
velopment might  have  been  very  different,  and  Hudson's 
Bay  might  have  been  for  Canada  what  the  Gulf  of  Mexico 
and  the  Mississippi  River  were  to  the  United  States  before 
1860.  The  repeal  of  the  Corn  Laws  by  Great  Britain  in 
1846  to  1849,  and  the  consequent  loss  of  the  preference  that 
Great  Britain  had  given  colonial  products,  led  to  special 
difficulties  and  resulted  in  serious  economic  depression, 
followed  by  talk  of  annexation  to  the  United  States.  The 
passage  of  the  Elgin-Marcy  Reciprocity  Treaty  in  1854, 
under  which  Canadian  natural  products  for  a  time  found 
a  free  market  in  the  United  States,  relieved  this  situation 
both  politically  and  economically  until  practically  the  end 
of  the  provincial  period. 

Manufacturing  industry  did  not  make  great  advances 
throughout  this  provincial  period.  The  tariff  was  never 
high  enough  to  give  an  extraordinary  stimulus  to  manu- 
facturing, and  other  lines  of  endeavor  clearly  offered  more 
attractive  and  sure  returns.  It  cannot  be  denied,  of  course, 
that  Canada  made  some  progress.  Between  1763  and  1791 
about  30,000  United  Empire  Loyalists  had  settled  in  the 
country.  In  1790,  Quebec  had  a  population  of  over  160,000. 
By  1851,  Quebec  had  a  population  of  890,000  and  Ontario 
of  952,000;  by  1871,  the  population  of  the  two  Provinces 
had  increased  to  1,912,000  and  1,621,000  respectively.^ 
Great  Britain  colonized  her  new  territory  with  a  great 
influx  of  English,  Irish,  and  Scotch,  and  Quebec  grew  in 
numbers  by  reason  of  immigration  and  the  remarkable 
increase  of  the  native  population.  As  we  have  already  seen, 
»  Donald,  op.  cit.,  pp.  297-98. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    13 

the  system  of  roads  was  gradually  extended;  several  canals 
were  built,  waterways  were  generally  improved  from  time 
to  time,  and  railroads  were  introduced  so  that  there  were 
4800  miles  in  operation  in  1875, i  By  1868,  Canada's  aggre- 
gate trade  amounted  to  $131,000,000.^  Nevertheless,  eco- 
nomic development  was  slow  and  irregular  and,  one  may 
well  add,  provincial,  in  view  of  the  influence  of  geographi- 
cal and  climatic  conditions,  the  lack  of  adequate  transpor- 
tation facilities,  and  the  movement  of  population  through 
and  from  Canada  to  the  United  States. 

§  5.  Finally,  by  the  British  North  America  Act  of  1867, 
a  union  of  practically  all  British  territory  in  North  America 
was  consummated,  and  to  some  extent  provincial  interests 
in  economic  questions  were  subordinated  to  a  larger  na- 
tional point  of  view.  Political  union  did  not,  however, 
improve  the  economic  situation  at  once.  In  fact,  a  period 
of  depression  followed  the  repeal  of  the  Reciprocity  Act  in 
1866,  and  after  a  few  brief  years  of  prosperity,  from  1869 
to  1872,  the  financial  depression  of  the  seventies  set  in. 
This,  with  other  depressions  in  the  early  eighties  and  in  the 
nineties,  made  the  whole  period  from  1867  to  1897  an  era 
of  trial. 

Throughout  the  period  of  Confederation  the  develop- 
ment of  Canada  was  greatly  hampered  by  the  tariff  wall 
set  up  between  Canada  and  the  United  States.  After  the 
Civil  War  the  rates  of  duty  on  most  goods  entering  the 
United  States  were  higher  than  ever  before,  and  in  1879 
Canada  herself  adopted  the  "National  Policy  of  Protec- 
tion." As  a  result  of  these  artificial  restrictions,  both  coun- 
tries lost  the  advantages  of  international  trade,  but  the 
Canadian  producers  of  raw  materials  suffered  more  than 
the  American  producers  through  inability  to  secure  as  large 
a  market  as  they  needed.  In  other  instances,  the  Canadian 
tariff  so  raised  the  prices  of  manufactured  articles  that  en- 

»  Canada  Year-Book,  1913,  p.  443.  «  Ibid.,  p.  227. 


14    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ter  into  the  manufacture  of  other  products  as  to  impede  the 
exploitation  of  Canada's  natural  resources.  While  the  Ca- 
nadian tariff  undoubtedly  encouraged  the  introduction  of 
many  Canadian  manufacturing  industries,  yet  it  certainly 
was  a  great  burden  on  Canada's  extractive  industries.  The 
high  cost  of  machinery  was  a  particularly  important  case 
of  this  effect  of  the  high  tariff.  Since  very  little  machinery 
has  been  made  in  Canada  until  recently,  a  protective  tariff 
in  most  instances  enormously  increased  the  cost  of  securing 
up-to-date  machines.  It  is  notorious  that,  in  many  cases, 
the  machinery  in  use  in  Canada  was  several  years  behind 
current  inventions.  The  tariff  on  agricultural  implements 
has  always  been  a  special  grievance  to  the  farmers.  In  fact, 
this  is  so  true  that  the  manufacturers  of  implements  main- 
tain that,  whenever  adverse  criticism  of  the  tariff  arises, 
they  have  to  bear  the  chief  burden  of  tariff  reductions.  For 
a  long  time  this  burden  applied  also  to  mining  operations, 
until,  in  1907,  certain  machinery  entering  Canada  for  use 
in  mining  was  placed  on  the  free  list.  There  seems  to  be 
some  basis,  then,  for  the  statement  that  the  tariff  on  ma- 
chinery was  a  far  greater  burden  on  the  purchasers  than 
the  benefit  to  the  producers  of  this  protected  list  of  com- 
modities warranted.^ 

Canada  suffered,  too,  from  the  lack  of  certain  agents  of 
production.  Most  important  was  the  lack  of  capital.  For 
some  reason  or  other,  Canadians  themselves  preferred  the 
chimney-piece  as  the  repository  of  their  hard-earned  gains. 
British  investors  long  remained  cautious  about  investing  in 
Canada.  British  disappointment  in  the  value  of  the  secu- 
rities of  the  Grand  Trunk  Railway  was  for  a  protracted 
period  a  great  blow  to  Canada's  borrowing  power.  Mean- 
while, Great  Britain  had  ample  opportunity  to  invest  else- 
where, especially  in  the  United  States.  For  many  years 
American  capital,  which  to-day  is  undertaking  a  very  large 

1  "The  Industrial  Development  of  Ca.na.da.,"  American  Machinist,  vol. 
XXIV,  p.  905. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    15 

part  of  the  task  of  developing  Canadian  manufactur- 
ing industry,  found  sufficient  opportunities  at  home,  and 
Canada  was  ignored.  Of  course,  this  lack  of  capital  may  be 
partly  explained  by  the  fact  that  for  a  long  time  Canada 
herself  offered  little  or  no  encouragement  to  industry.  The 
Canadian  home  market  was  not  large  enough  to  support 
any  large  establishment,  and  the  manufacturers'  tariff- 
aided  rivals  in  the  United  States  were  able  to  supply  the 
Canadian  market  at  rates  which  prevented  the  investment 
in  Canada  of  American,  British,  and  domestic  capital. 
Again,  the  lack  of  coal  in  close  proximity  to  manufacturing 
centers  was  a  retarding  factor.  While  water  power  is  found 
in  abundance,  and  is  now  minimizing  the  importance  of  this 
deficiency,  in  the  nineteenth  century  this  was  of  relatively 
little  value  in  the  nation's  industrial  progress.  Conse- 
quently, during  this  period,  when  close  proximity  of  coal 
to  iron  ores  was  an  essential  condition  for  the  development 
of  the  iron  and  steel  industry,  Canada  was  at  a  distinct 
disadvantage. 

Geographical  features  still  restrained  the  westward  move- 
ment and  the  building  of  transcontinental  railways.  As 
Lakes  Winnipeg  and  Manitoba  stretched  themselves  one 
hundred  miles  north  and  south  only  a  short  distance  from 
the  American  border,  all  transcontinental  railways  were 
forced  to  round  the  southern  end  of  these  lakes,  and  as  a 
result  only  the  southern  border  of  Canada  was  developed. 
Only  in  the  last  few  years  has  the  fact  been  recognized  that 
the  Northland  is  to  play  an  important  role  in  western  devel- 
opment. 

Nevertheless  a  certain  amount  of  progress  was  made. 
The  building  of  the  Intercolonial  Railway  in  the  seventies 
and  of  the  Canadian  Pacific  in  the  eighties  brought  a 
greater  unity  of  economic  relations  by  joining  the  Mari- 
time, Central,  and  Western  Provinces  and  districts  and 
thus  somewhat  counteracted  the  retarding  influence  of  the 
geographical  characteristics  of  Canada.   Railway  mileage 


16    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

increased  from  2278  miles  in  1867  to  6858  miles  in  1879  and 
16,550  miles  in  1897.^  The  granting  of  subsidies  to  the 
Canadian  Pacific  and  the  building  of  the  Intercolonial 
Railway  by  the  Government  involved  heavy  expenditures, 
and  even  the  Liberal  Party,  despite  its  opposition  to  high 
protection,  was  forced  in  1874  to  impose  higher  duties  on 
imports.  Then,  in  1879,  the  national  policy  of  protection 
was  put  into  operation  by  the  Conservative  Party,  which 
extended  its  application  from  time  to  time  to  an  increasing 
number  of  growing  industries.  Under  the  influence  of  pro- 
tection and  the  building  of  Canadian  railways  considerable 
progress  was  made  in  manufacturing,  but  only  to  supply 
the  Canadian  market.  The  population  grew  from  about 
3,000,000  to  5,000,000,  and  Canada's  aggregate  externa! 
trade  grew  from  $131,000,000  in  1868  to  $300,000,000  in 
1897.2  Occasional  periods  of  real  prosperity  brightened  the 
general  era  of  difficulty.  Nevertheless,  it  has  to  be  ad- 
mitted that  the  success  of  Confederation  was  political 
rather  than  economic,  and  that,  until  just  before  the  begin- 
ning of  the  twentieth  century,  Canada  did  not  seem  to 
have  the  prospect  of  any  great  economic  future. 

§  6.  In  the  recent  era  of  prosperity  which  the  future  will 
date  roughly  from  1900,  a  remarkable  expansion  of  industry 
and  agriculture  and  an  extraordinary  increase  of  popula- 
tion have  come  to  Canada.  The  Government,  by  means  of 
a  vigorous  encouragement  of  immigration,  has  brought 
many  settlers  to  the  Dominion,  and  a  lenient  and  progres- 
sive land  policy  has  made  the  Canadian  West  the  land  of 
opportunity  for  those  who  will,  for  a  few  years,  brave  the 
diSiculties  and  trials  of  a  pioneer  life.  An  increase  of  rail- 
way mileage  from  16,550  miles  in  1897  to  29,304  miles  in 
1913  has  opened  up  ^  new  areas  for  agricultural  production 
and  an  agricultural  population,  and  has  resulted  in  employ- 
ment for  many  people  in  construction  work  of  various 

1  Canada  Year-Booh,  1913,  p.  443.      »  Ihid.,  p.  228.      »  Ibid.,  p.  445. 


THE  INDUSTRIAL  DEVELOPMENT  OF  CANADA    17 

kinds  on  the  frontier  and  in  the  manufacturing  cities.  Not 
only  has  the  emigration  to  the  United  States  been  checked, 
but  the  tide  has  actually  turned  in  the  other  direction. 
Canada's  population  increased  to  7,200,000  in  1910  ^  and 
probably  has  mounted  to  over  8,000,000  in  1914.  The  cli- 
mate has  not  prevented  the  desirable  immigration  in  the 
last  few  decades.  While  it  tends  to  exclude  the  less  desir- 
able southern  Europeans,  it  presents  no  terrors  to  the 
hardy  races  of  northern  Europe.  Moreover,  it  has  given 
the  Canadian  people  the  v-igor  and  energy  necessary  for  the 
task  of  developing  the  opportunities  at  hand.  Scientific 
investigation  has  shown  that  climatic  conditions  are  not 
an  impassable  barrier  to  many  important  branches  of  agri- 
culture and,  in  fact,  are  an  advantage  in  the  production  of 
hardy  varieties  of  certain  grains.  While  the  climate  ^-ill 
always  present  certain  difficulties,  these  '^\'ill  henceforth 
retard  Canadian  development  less  than  in  the  past. 

As  we  have  already  seen.  Confederation  largely  destroyed 
the  provincial  spirit  of  the  pre-Confederation  era,  and  while 
there  is  still  and  probably  always  wall  be  evidence  of  par- 
tial local  interest,  nevertheless,  the  vision  of  the  broader 
national  interests  is  more  widespread.  This  is,  of  course, 
a  natural  result,  not  only  of  Confederation,  but  also  of  the 
growth  of  agencies  of  communication  and  transportation. 
Economically,  Canada,  with  her  system  of  railways  run- 
ning east  and  west  across  the  continent,  is  more  of  a  unit 
than  ever  before,  and  the  disadvantages  of  geographical 
features  are  being  overcome  as  rapidly  as  is  good  for  so 
young  a  nation.  This  growth  has  necessitated  the  invest- 
ment of  much  Canadian,  and  of  British,  American,  French, 
and  other  foreign  capital,  which  now  finds  in  Canada  an 
unexampled  field  to  exploit.  In  fact,  the  most  important 
question  is  whether  Canada  has  not  been  borrowing  too 
rapidly.  The  lack  of  coal  in  Ontario,  while  still  a  disadvan- 
tage, is  being  gradually  overcome  by  the  use  of  unrivaled 
*  Donald,  op.  cit.,  p.  306. 


18    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

water  power  and  the  electricity  derived  therefrom.  The 
tariff  on  many  lines  of  machinery  has  been  withdrawn  or 
reduced,  to  the  advantage  of  extractive  and  other  indus- 
tries, and,  while  Canada  rejected  the  Reciprocity  proposals 
of  1911,  the  partial  withdrawal  of  the  United  States  from 
the  world  markets  in  raw  products,  especially  hard  grains, 
timber,  and  minerals,  together  with  the  reduction  of  the 
American  tariff  on  many  articles  and  the  increased  home 
market,  has  opened  a  new  opportunity  for  Canadian  ex- 
tractive industries.  The  building  of  railways  and  other 
construction  work  of  the  last  two  decades  and  the  increase 
of  the  population  have  provided  Canadian  manufacturers 
with  a  larger  market,  somewhat  curtailed,  it  is  true,  by  the 
importation  of  the  products  of  American  tariff-fed  manu- 
facturing industries.  Ample  proof  of  Canada's  recent  pros- 
perity lies  in  the  fact  that,  besides  her  domestic  trade, 
Canada's  exports  increased  from  $137,000,000  in  1897  to 
$479,000,000  in  1914;  her  imports  increased  from  $119,- 
000,000  in  1897  to  $650,000,000  in  1914;  and  her  aggregate 
external  trade,  from  $257,000,000  in  1897  to  $1,130,000,000 
in  1914.^  In  short,  in  the  last  two  decades,  Canada  has 
been  ushered  into  an  era  of  remarkable  material  prosperity. 

§  7.  As  we  have  already  suggested,  the  history  of  the 
Canadian  iron  and  steel  industry  is  necessarily  woven  into 
the  web  of  general  industrial  conditions.  For  many  years  it 
struggled  on  in  spite  of  the  backward  condition  of  the 
country.  Many  were  the  failures  that  overtook  early  enter- 
prises. The  last  decade,  however,  has  seen  an  enormous 
development  of  this  special  industry  as  of  Canadian  indus- 
try in  general.  The  development  of  transportation  facili- 
ties has  opened  up  new  markets  by  building  up  a  rapidly 
increasing  demand  in  the  West.  Railway  construction  has 
itself  caused  a  direct  demand  for  steel  rails,  bridge  materi- 
als, car  wheels,  and  other  iron  and  steel  products.  Building 
1  Canada  Y ear-Book,  1913,  p.  228. 


THE  INDUSTRLVL  DE\^LOPMENT  OF  CANADA    19 

operations  have  been  calling  for  a  larger  output  of  struc- 
tural steel.  The  expansion  of  agriculture  has  created  a  new 
demand  for  steel  entering  into  the  manufacture  of  agricul- 
tural implements,  wire  fencing,  and  tools.  Immigration  is 
supplying  the  labor  force  previously  inadequate  for  any 
large  industrial  enterprise.  Last,  but  not  least,  the  growth 
of  the  country  has  resulted  in  the  discovery  of  unknown 
deposits  of  raw  materials,  chief  among  them  coal  and  iron 
ore,  on  which  the  industry  we  are  considering  depends. 


CHAPTER  II 

NATURAL    RESOURCES    OF    THE    CANADIAN    IRON    AND 
STEEL   INDUSTRY  1 

§  1.  While,  as  we  have  seen,  the  industrial  development 
of  a  country  exercises  a  very  important  influence  on  its 
iron  and  steel  industry,  yet  this  influence  is  qualified  and 
limited  by  the  nature  of  the  available  resources  and  the 
conditions  affecting  the  assembling  and  use  of  ore,  coal,  flux, 
and  other  materials.  Before  considering  the  resources  and 
natural  conditions  of  the  Canadian  iron  and  steel  industry, 
it  is  desirable  to  discuss  the  factors  influencing  the  devel- 
opment and  use  of  these  essentials. 

An  estimate  of  the  iron  supplies  of  a  country  must  in- 
clude consideration  of  the  question  of  general  availability, 
and  this,  of  course,  involves  the  problem  of  the  relationship 
of  costs  and  prices.  If  ores  are  of  low  grade,  if  they  are 
diflScult  to  mine,  if  they  are  far  distant  from  the  market,  or 
from  fuel  and  fluxing  materials,  or  if  they  are  subject  to 
poor  or  costly  transportation,  their  immediate  utilization 
may  be  impracticable,  and  future  developments  must  be 
awaited.  On  the  other  hand,  if  the  demand  for  the  product 
is  strong,  if  the  production  of  ore  is  protected  by  an  ade- 
quate customs  duty,  or  if  the  market  of  a  neighboring  for- 
eign nation  is  a  large  and  open  one,  otherwise  unmarketable 
ores  may  be  profitably  mined. 

Of  fundamental  importance  in  the  availability  of  iron 
ores  is  the  matter  of  costs.  Of  these,  the  most  important 
are  the  costs  of  mining  the  ore,  of  transportation  to  the 
furnace,  and  such  costs  of  reduction  as  arise  from  the 
nature  of  the  ore  itself. 

1  See  the  maps  in  the  Appendix  showing  the  location  of  the  resources 
here  described. 


NATURAL  RESOURCES  21 

§  2.  A  point  of  first  consideration  in  the  cost  of  ore  is  the 
nature  of  mining  conditions.  Indeed,  the  cost  of  raising  the 
ore  to  the  surface  may  prohibit  its  utilization.  There  are 
limiting  depths  beyond  which  mining,  on  account  of  the 
amount  of  water  present,  may  become  altogether  too 
expensive.  Whereas  many  deposits  can  be  worked  cheaply 
in  open  pits  or  for  a  certain  distance  under  the  surface,  the 
cost  of  stripping  and  timbering  may  prevent  working  at 
greater  depths.  Another  kind  of  limiting  condition  arises 
from  the  fact  that  in  many  cases  hematites  are  mixed  with 
foreign  materials,  or  "gangue,"  from  which  the  ore  must 
be  separated  by  washing.  Similar  conditions  affect  the 
availability  of  many  deposits  of  magnetite,  except  that 
here  the  impurities,  often  other  minerals,  are  so  closely 
associated  with  the  iron  ore  that  they  must  be  separated 
by  magnetic  concentration.  Where  this  condition  exists, 
the  use  of  such  ores  depends,  of  course,  on  the  cost  of  the 
process  of  concentration  and  its  relation  to  competition 
with  alternative  sources  of  supply.^ 

§  3.  Of  great  importance  is  the  accessibility  of  ores;  the 
character  of  transportation  facilities  and  proximity  to  fuel. 
Naturally,  many  deposits  have  long  remained  undiscov- 
ered because  of  lack  of  means  of  transport  which  would 
have  stimulated  and  aided  prospecting.  Others  are  known 
to  exist  in  regions  so  remote  from  rail,  river,  or  canal  facili- 
ties and  from  fuel  supplies  that  they  may  be  considered 
unavailable  so  long  as  they  are  compelled  to  compete  with 
more  accessible  ores.  Yet  they  may  be  taken  into  account 
in  considering  total  reserves,  for  the  influence  of  accessi- 
bility is  only  relative,  and  no  deposit  which  is  sufficiently 
large  and  valuable  to  warrant  at  some  future  date  the 
expenditure  necessary  for  constructing  the  means  of  trans- 
portation can  be  regarded  as  permanently  unavailable.^ 

^  United  States  Geological  Survey,  1908,  Report  on  Mineral  Resources 
of  the  United  States,  p.  117. 
»  Ibid.,  p.  117. 


22    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Allied  to  this  feature  is  the  problem  of  the  supply  of  coal 
and  the  distance  of  ores  from  fuel.  This  condition  may  be 
a  more  serious  disadvantage  or  more  valuable  asset  than 
the  absence  or  presence  of  transport  service,  which  at  best 
is  limited  in  power  economically  to  assemble  the  raw 
materials.  England  won  and  long  held  supremacy  in  steel- 
making,  in  spite  of  the  relative  inferiority  of  her  iron  ore 
resources,  because  of  the  close  proximity  of  the  ores  to 
unsurpassed  supplies  of  fuel.  But  the  younger  industry  of 
the  United  States,  notwithstanding  the  handicap  of  a 
later  start,  and  widely  divided  natural  resources,  has  sur- 
mounted this  difficulty.  Cheap  water  and  rail  transporta- 
tion has  almost  neutralized  the  wide  distances  between  the 
ore  and  fuel.^  Water  transportation  is  able  to  play  a  great 
part  in  making  possible  the  assembling  of  raw  materials 
that  would  otherwise  be  commercially  separated.  England, 
for  instance,  is  able  to  receive  by  water  the  high-grade  ores 
of  Bilboa,  Spain.  Nowhere  in  the  United  States  are  large 
quantities  of  the  best  steel-making  ores^  found  in  close 
proximity  to  coal.  Yet  the  Great  Lakes  supply  a  means 
of  transportation  which  has  made  possible  the  rapid  growth 
of  the  iron  and  steel  industry  in  the  United  States  in  the 
last  twenty  years.  Indeed,  this  factor  has  had  much  to  do 
with  the  reduction  of  the  price  of  Bessemer  steel  in  the  last 
fifteen  years. ^ 

This  phase  of  the  problem  will  be  seriously  affected  by 
the  fact  that  the  most  noticeable  tendency  in  the  iron 
industry  is  to  use  ores  of  lower  average  content.  This 
tendency  will  undoubtedly  continue  as  the  more  accessi- 
ble portions  of  the  richer  deposits  are  worked  out  and  as 
technical  improvements  are  introduced.  The  decentrali- 
zation of  the  iron  industry  may  naturally  be  expected  to 

^  E.  Phillips,  "Competition  in  Iron  and  Steel-making,"  Engineering 
Magazine,  vol.  xxi,  p.  175. 

2  Ore  and  coal  are  found  together  in  Alabama,  but  the  ore  is  not  of 
Bessemer  grade. 

3  J.  C.  Mills,  Our  Inland  Seas,  p.  358. 


NATURAL  RESOURCES  23 

follow  the  use  of  inferior  ores.  This  decrease  in  the  iron 
content  of  the  ore  used  involves  a  corresponding  increase 
in  the  cost  of  transporting  the  ore  per  unit  of  pig  iron 
produced.  This  can  be  partially  avoided  by  producing 
the  pig  iron  at  points  nearer  the  source  of  the  ores.  This, 
in  turn,  will  involve  an  increase  in  the  proportion  of  fuel 
used  in  the  regions  producing  the  ore  and  an  increase  in  the 
cost  of  transporting  fuel  per  ton  of  pig  iron  produced.^  But 
it  appears  already  that  the  increased  cost  of  transporting 
ores,  combined  with  expansion  of  markets  in  the  Northwest 
of  the  United  States  and  in  western  Canada,  has  encour- 
aged the  building  of  blast  furnaces  at  Duluth,  Sault  Ste. 
Marie,  and  at  Port  Arthur,  in  spite  of  the  higher  costs  of 
transporting  coal  per  unit  of  pig  iron  produced.  Without 
doubt  Canada  will  reap  the  benefit  of  such  a  tendency  by 
increased  use  of  her  ores  at  or  near  deposits. 

§  4.  In  addition  to  the  cost  of  mining  and  the  accessi- 
bility of  ores,  a  third  factor  affecting  the  availability  of 
ores  is  the  character  of  the  ore  itself,  and  the  consequent 
effect  on  the  cost  of  production  of  iron.  The  content  of 
metallic  iron  in  ores  at  present  varies  from  35  to  75  per 
cent.  This  wide  variation  in  the  quality  of  the  ores  used 
is  due  in  part  to  the  presence  of  other  materials,  such  as 
lime,  which  might  make  the  ore  almost  self -fluxing  and 
permit  the  use  of  otherwise  useless  ores.  Some  ores  require 
roasting  to  eliminate  sulphur.  The  percentage  of  copper, 
chromium,  manganese,  and  especially  phosphorus,  affects 
seriously  the  method  and  cost  of  production  and  the  quality 
of  the  product. 

§  5.  Another  factor  touching  the  economic  availability 

of  iron  ores  is  the  nature  of  the  ownership  of  raw  materials, 

an  important  element  in  the  power  of  the  United  States 

Steel  Corporation,    When   a   large  company  controls  a 

^  United  States  Geological  Survey,  op.  cit.,  p.  118. 


24    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

variety  of  ores  and  is  equipped  to  assemble  them,  and  to 
form  any  desired  mixtm-e  of  grades,  it  may  use  with  advan- 
tage ores  which  could  not  be  used  by  a  small  company 
compelled  to  dispose  of  a  single  grade  of  product  and  kind 
of  ore  in  the  open  market.^  Furthermore,  a  company  con- 
trolling a  great  part  of  the  natural  resources  of  high  grade 
might  thereby  secure  virtual  monopoly  of  a  country's  iron 
and  steel  industry.  Admittedly,  the  greatest  factor  in  the 
strength  of  the  United  States  Steel  Corporation  is  its  prac- 
tical control  of  most  of  the  Bessemer  ores  of  commercial 
value  in  the  United  States. 

Owing  to  the  varying  importance  of  these  different  fac- 
tors, the  future  advantage  in  the  availability  of  resources 
will  obviously  pass  from  old  to  new  districts,  or  at  least 
spread  to  include  new  areas  of  supply.  Notwithstanding 
the  increase  in  the  cost  of  transportation  and  smelting  of 
ores,  per  unit  of  iron  produced,  lower  grades  of  ores  will  be 
called  upon  as  the  higher  grade  and  Bessemer  ores  of  the 
Lake  Superior  region  become  depleted.  Likewise  technical 
improvements  may  completely  change  the  whole  situation. 
Electro-metallurgy,  which  is  as  yet  only  in  the  stage  of  the 
scientifically  possible,  may  become  economically  advan- 
tageous. The  extended  use  of  the  basic  open-hearth  system 
is  providing  an  increasing  market  for  many  hitherto  value- 
less ores.  Most  important  Canadian  ore  deposits  are  best 
treated  by  this  process.  The  increased  use  of  magnetic 
concentration  may  be  of  great  importance  in  the  economical 
use  of  ores,  much  to  the  advantage  of  Canadian  sources  of 
supply.  Proximity  to  the  fuel  supply  may  become  of  less 
importance  as  it  becomes  profitable  to  transport  coal  or 
coke  to  the  ores. 

There  is,  then,  no  reason  for  believing  that  the  future  of  a 

country's  iron  and  steel  industry  rests  on  the  present  state 

of  affairs.  A  nation  or  locality  may  shortly  gain  a  decided 

advantage  in  this  regard,  and  yet,  since  the  factors  which 

^  United  States  Geological  Survey,  op.  cit.,  p.  118. 


NATURAL  RESOURCES  25 

have  been  mentioned  as  influencing  the  availability  of  iron 
ore  for  commercial  use  will  probably  retain  a  considerable 
importance,  it  is  well  worth  while,  before  entering  further 
on  the  study  of  the  Canadian  iron  and  steel  industry,  to 
consider  the  character  of  the  present  known  resources. 

§  6.  It  is  a  striking  commentary  on  the  extent  and  char- 
acter of  the  iron  ores  of  Canada  that  the  greater  part  of  the 
ores  consumed  in  the  Dominion  is  not  local  product,  but 
imported  from  Newfoundland  and  the  United  States.  Yet 
Canada  possesses  all  necessary  raw  materials  for  a  large 
iron  and  steel  industry.  The  most  important  of  those  now 
available  belong  to  the  Maritime  Provinces,  to  Quebec, 
and  to  Ontario.  For  our  purpose,  those  of  Newfoundland 
may  be  included;  and  those  of  British  Columbia  and  else- 
where will  be  treated  because  of  their  potential  value. 

§  7.  The  southern  part  of  Nova  Scotia  is  entirely  lacking 
in  iron  ores,^  but  there  are  numerous  deposits  in  other  parts 
of  the  Pro\Tnce.  Many  of  the  deposits,  however,  are  so 
small  as  to  be  of  no  economic  importance,  and  may  be  ne- 
glected here. 

Several  deposits  are  known  to  exist  in  Annapolis  County, 
on  the  south  shore  of  the  Bay  of  Fundy .  Deposits  of  magne- 
tite at  Clementsport  would  probably  yield  a  large  amount  of 
ore  of  fair  grade.^  Deposits  of  hematite,  a  few  miles  east,  at 
Nictaux  Falls,'  in  Annapolis  County,  are  the  most  promis- 
ing in  Nova  Scotia.  There  are  indications  that  the  district 
around  the  Nictaux  Falls  may  be  regarded  as  of  consider- 
able importance.  Transportation  by  rail  is  available  from 
both  the  Clementsport  and  Torbrook  fields  in  one  direc- 
tion, and  by  water,  after  a  short  haul,  in  another  direction. 
Water  transportation  brings  them  into  close  contact  with 
the  Cumberland  coal-fields  of  the  Province.^   Omitting  a 

1  J.  E.  Woodman,  The  Iron  Ores  of  Nora  Scotia,  p.  1. 

2  Ibid.,  pp.  38-48.  ^  -^^^^  Torbrook. 
*  Woodman,  ojp.  cii.,  pp.  48-50. 


26    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

consideration  of  the  unimportant  deposits  that  stretch  all 
along  the  south  shore  of  the  Bay  of  Fundy,  we  come  to  the 
district  southwest  of  the  Cobequid  Mountains  in  Colches- 
ter and  Cumberland  Counties,  where  a  great  length  of 
siderite  and  ankerite  occurs  in  close  proximity  to  coal  and 
fluxing  material.  These  are  very  low  in  phosphorus  and 
sulphur.^  The  ankerite  of  the  Londonderry  district  con- 
tains both  flux  and  ore,  but  its  use  causes  such  irregularities 
in  smelting  that  its  value  is  slight  unless  it  can  be  mixed  with 
other  ores,  such  as  those  from  the  Nictaux-Torbrook  field.^ 

Farther  east,  in  the  East  River  district  of  Pictou  County, 
deposits  of  limonite  and  hematite,  as  a  rule  superior  to 
Newfoundland  ore,  are  spread  over  many  miles  of  terri- 
tory. The  use  of  these  would  require  carriage  to  Pictou 
Harbor — a  distance  of  nineteen  or  twenty  miles  by  rail. 
Mining  operations  are  more  expensive  than  in  Newfound- 
land, and  so  these  ores  do  not  now  compete  with  the 
Newfoundland  ore  used  by  the  steel  companies  in  Cape 
Breton.^  Yet,  proximity  to  the  Pictou  coal-fields  has  made 
them  of  some  economic  importance  in  the  past.  Many 
hematites  are  found  on  the  shore  of  Antigonish  County. 
While  some  of  these  have  been  exploited,  they  are  too 
siliceous  and  too  irregular  to  be  of  great  value.  One  lead, 
however,  may  prove  to  be  of  large  capacity,  sufficient  to 
justify  the  building  of  a  railway  to  tidewater. "* 

In  Cape  Breton  a  few  deposits  occur.  East  of  Whyco- 
comagh,  large  amounts  of  hematite  and  magnetite  are 
found,  which,  though  irregular  in  formation,  are  fair  in 
quality,  and  can  be  shipped  to  Sydney  by  water  at  low 
cost.^  Near  Little  Bras  d'Or  Lake,  and  only  a  few  miles 
from  the  blast  furnaces  at  Sydney,  irregular  bodies  of 
hematite  and  siderite  have  been  located.  While  they  are 
otherwise  of  good  grade,  they  are  apt  to  be  high  in  sulphur. 

1  Woodman,  op.  cit.,  pp.  146-70.  ^  Jhid.,  p.  27. 

^  J.  S.  Jeans,  Canada's  Resources  and  Possibilities,  pp.  102-03. 

*  Woodman,  op.  cit.,  pp.  175-206.  ^  /^-^i.^  pp,  209-15. 


NATUR.^X  RESOURCES  27 

As  they  are  close  to  the  waterside,  they  could  be  trans- 
ported to  Sydney  at  low  cost.^ 

In  general,  it  may  be  said  of  Nova  Scotia  ores  that  there 
are  few  large  deposits  of  such  known  quality  and  size  as 
would  insure  a  large  output  for  a  sufficient  number  of  years 
to  warrant  the  erection  of  new  iron  and  steel  works.  Many 
small  deposits  could  be  worked  if  the  ore  were  mixed  with 
other  ores.  But  the  grade  of  large  deposits  is  low,  and  of 
small  deposits,  variable,  and  most  Nova  Scotia  ores  are 
particularly  high  in  phosphorus  and  silicates.  While  the 
deposits  are  comparatively  shallow,  the  ores  require  hoist- 
ing. In  short,  though  Nova  Scotia  contains  deposits  of 
considerable  economic  value,  these  can  be  made  profitable 
only  as  they  complement  other  sources  of  ore  supply.^ 

§  8.  Nova  Scotia  is,  on  the  other  hand,  favored  with 
some  exceptional  conditions.  Limestone  for  flux  is  found  in 
sufficient  quantities  throughout  the  Province.  Still  more 
important  are  the  coal-fields  of  Nova  Scotia,  which  are  so 
numerous  and  so  well  distributed  as  to  be  capable  of  supply- 
ing fuel  at  a  number  of  centers,  if  necessary.  Cape  Breton  is 
particularly  well  supplied.  The  beds  of  coal  at  Sydney  and 
Sydney  Mines,  by  far  the  most  important,  occupy  an  area 
of  about  two  hundred  square  miles.  The  conditions  of 
extraction  and  shipment  are  very  favorable.  Although  a 
great  part  of  the  field  is  hidden  beneath  the  ocean,  the 
seams  can  be  followed  beneath  the  sea  by  submarine  work- 
ings.^ The  coal  is  of  the  bituminous  variety  with  compara- 
tively little  irregularity.  Some.seams  produce  coal  admir- 
ably adapted  for  purposes  of  smelting.  Tests  show  that  it 
is  only  slightly  higher  in  sulphur  than  the  Connellsville 
coal,  and  that  the  excess  can  be  economically  washed  out.* 

^  Woodman,  op.  cit.,  p.  216.  «  Ibid.,  pp.  8-16. 

'  Canada,  Geological  Survey,  vol.  xi,  p.  363. 

*  P.  T.  McGrath,  "Manufacture  of  Iron  and  Steel  in  Cape  Breton," 
Engineering  Magazine,  vol.  xxi,  p.  375. 


28    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

The  Sydney  coal-beds  in  Cape  Breton  are  supplemented 
by  others,  in  Richmond  and  Inverness  Counties,  In  Rich- 
mond County,  little  systematic  work  has  as  yet  been  done.^ 
Inverness  County  is  a  more  important  source.  A  series  of 
exposed  measures  are  found  skirting  the  coast  and  extend- 
ing inland  a  few  miles  and  dipping  under  the  ocean  to 
unknown  distances.  Three  companies  are  now  operating 
these  deposits.  A  great  drawback  is  the  lack  of  suitable 
harbors  in  the  vicinity,  but  this  may  be  overcome  by 
building  a  railway  along  the  coast.^ 

The  two  chief  coal  areas  on  the  mainland  are  in  Pictou 
and  Cumberland  Counties.  Pictou  County  contains  a  bed 
covering  only  about  fifty  square  miles;  yet  the  seams  are 
deep  and  the  field  is  well  situated  for  excellent  shipping 
connections  by  rail  and  water.  The  nearest  water  ship- 
ments are  from  Pictou  Harbor,  ten  miles  distant.  This  field 
has  been  worked  longer  than  any  other  in  the  Province. 
The  coal  produces  coke  which  is  excellent  for  metallurgical 
purposes.^  In  Cumberland  County  is  found  the  largest  coal 
measure  of  Nova  Scotia.  It  comprises  an  area  of  approxi- 
mately three  hundred  and  fifty  square  miles  composed  of 
two  sections,  the  Joggins  and  the  Springhill  districts.  An 
excellent  coke  has  been  made  in  beehive  ovens  at  London- 
derry from  a  mixture  of  Cumberland  and  Pictou  coals. 
The  Joggins  area  is  close  to  Chignecto  Bay,  and  the 
Springhill  section  is  connected  with  the  coast  by  a  short 
railway.  Of  eight  companies  operating  in  the  Springhill 
district,  the  Cumberland  Coal  and  Railway  Company, 
now  controlled  by  the  Dominion  Steel  Corporation,  is  by 
far  the  most  important,  and  the  properties  of  the  com- 
pany may  be  considered  of  great  value  for  metallurgical 
purposes.* 

Nova  Scotia,  then,  has  practically  inexhaustible  supplies 
of  coal,  most  of  which  may  be  used  for  making  coke,  and 

1  Canada,  Geological  Survey,  vol.  xi,  p.  42,  S.      *  Ihid.,  p.  41,  S. 
»  lUd.,  p.  43,  S.  . "  IhU.,  p.  56.  S. 


NATURAL  RESOURCES  29 

favorably  located  for  use  with  imported  ores.  No  part 
of  the  country  is  far  from  rail  or  water  transportation,  and 
many  parts  of  the  coast  furnish  excellent  harbors,  of 
which  Sydney  is  by  far  the  most  important  for  the  iron 
and  steel  industry.^ 

§  9.  In  New  Brunswick  several  ore  deposits  have  been 
discovered.  A  few,  at  Woodstock,  in  Charlotte  County, 
are  as  yet  of  little  economic  importance,  either  because  of 
distance  from  the  market,  or  because  of  the  smallness  or 
inferior  character  of  the  deposits.  A  large  deposit  found 
near  Bathurst,  on  Chaleur  Bay,  is,  however,  worthy  of  the 
attention  it  is  receiving.  The  mines  have  a  daily  capacity 
of  1000  to  2000  tons.  The  ores,  which  are  of  fair  grade, 
are  shipped  either  to  Bathurst,  twenty-one  miles  distant, 
or  via  the  Intercolonial  Railway  to  Newcastle,  where  ore 
docks  have  been  provided.  This  deposit  is  certainly  the 
most  important  source  of  ore  in  the  Maritime  Provinces, 
and  may  yet  warrant  the  building  of  blast  furnaces  at 
Bathurst.^ 

The  chief  source  of  iron  ore  for  use  in  the  iron  and  steel 
industry  of  Nova  Scotia  is  the  well-known  Wabana  Mine 
on  Bell  Island,  in  Conception  Bay,  Newfoundland.  The 
mine  is  the  most  remarkable  of  its  kind  in  the  world.  For 
several  years  it  was  worked  by  open  cut,  the  ore  being 
accessible  by  merely  stripping  off  the  surface  covering  of 
rock  and  loosening  the  hematite  by  steam  drill  and  dyna- 
mite. The  upper  workable  bed  has  an  area  of  240  acres  and 
a  thickness  of  six  feet.  The  lower  bed  is  much  larger,  cover- 
ing about  817  acres  in  sight.  The  beds  dip  downward  at  an 
angle  of  eight  degrees,  and  extend  under  the  waters  of  the 
bay.  It  is  known  that,  when  the  ore  now  available  is 
exhausted,  submarine  operations  can  provide  an  incalcul- 
able additional  supply.^  The  cost  of  mining  is  very  low. 

*  Woodman,  op.  cit.,  p.  1.  ^  Monetary  Times,  vol.  XLV,  p.  741. 

»  McGrath,  op.  eit.,  p.  S76. 


30    THE  CANADL\N  IRON  AND  STEEL  INDUSTRY 

The  ore  can  be  placed  on  board  steamship  one  mile  from 
the  mines  and  transported  to  Sydney  at  very  low  rates. 
While  it  is  not  so  rich  as  the  Lake  Superior  ores,  yet  it  is  of 
fair  grade.  It  mixes  readily  with  other  ores,  and  its  ease 
of  mining,  its  abundance,  accessibility ,  and  the  cheapness  of 
transport,  almost  neutralize  its  slight  shortage  in  mineral.^ 
The  Maritime  Provinces  and  Newfoundland  are  thus 
favored  by  excellent  measures  of  coal,  good  fluxing  materi- 
als, the  presence  of  iron  ore  deposits  of  great  commercial 
value  and  favorable  conditions  of  transportation,  all  of 
which  are  together  making  possible  the  development  of  a 
great  iron  and  steel  industry. 

§  10.  Even  though  the  resources  of  Quebec  are  not  so 
favorable  as  those  of  the  Nova  Scotia  industry,  that 
Province  has  long  been  the  scene  of  iron  and  steel  produc- 
tion. One  possible  source  of  supply  is  the  iron  sands  of  the 
Moisic  district.  These  assay  about  seventy  per  cent  iron 
and  are  particularly  free  from  phosphorus  and  sulphur. 
Smelting  of  these  ores,  however,  awaits  the  development  of 
economical  methods  of  concentration.^  North  of  Montreal, 
many  deposits  of  ore,  usually  of  the  magnetic  type,  have 
been  located,  but  in  most  cases  they  contain  so  much 
titanium  that  their  utilization  will  be  postponed  until  some 
method  of  economical  smelting  is  devised.^  There  are  some 
other  bodies  of  ore  of  low  grade  in  the  same  district,  and 
some  containing  too  much  sulphur  or  phosphorus  to  make 
them  suitable  for  blast  furnaces;  yet  they  will  probably  be 
worked  in  the  future  when  poorer  grades  of  ore  come  into 
general  use.^ 

The  most  important  deposits  in  Quebec  are  the  bog  iron 
ore  beds  which  are  found  in  many  parts  of  the  Province, 

1  McGrath,  o-p.  cit.,  p.  382.  '  Jeans,  op.  cit.,  p.  106. 

'  T.  J.  Nicholas,  "Mineral  Industry  in  Canada,"  American  Review  of 
Reviews,  vol.  xxxv,  pp.  714-15. 

*  Canada,  Report  on  the  Mining  and  Metallurgical  Industries,  1908, 
pp.  4.69-70. 


NATURAL  RESOURCES  81 

especially  in  Champlain,  St.  Maurice,  and  Bastican  Coun- 
ties. The  ore  is,  in  most  cases,  remarkably  free  from  such 
impurities  as  phosphorus  or  sulphur,  and  iron  made  there- 
from is  particularly  adapted  to  the  manufacture  of  car 
wheels  and  special  castings.  These  ores  are  being  rapidly 
formed  by  an  evolutionary  process  by  which  the  iron  is 
dissolved  from  ferruginous  rocks  by  the  organic  acids  in 
rainwater  and  later  concentrated  into  cakes.  The  body  of 
ore  is  thus  constantly  replaced.  Yet  even  these  ores  are 
present  in  only  limited  amount,  so  that  the  Quebec  indus- 
try must  be  largely  dependent  on  outside  sources  of  supply. 
The  fact  that  Quebec  is  entirely  lacking  in  coal  is  another 
limiting  condition.  Fuel  must  be  supplied  either  from  the 
forests  of  the  Province,  which  are  no  longer  a  very  satis- 
factory source,  or  from  the  far-distant  coal-fields  of  Nova 
Scotia  or  Pennsylvania.' 

§  11.  Ontario  is  more  liberally  supplied  with  iron  ores 
than  either  the  Maritime  Provinces  or  Quebec.  Probably 
no  other  part  of  America  can  claim  as  great  an  extent  of 
rock  so  favorable  for  the  occurrence  of  ore  deposits  as 
Ontario.^  Northern  Ontario  contains  rock  formations 
similar  to  those  found  throughout  Michigan,  Wisconsin, 
and  Minnesota,  including  iron  series  that  are  in  many 
cases  identical  with  those  associated  with  the  ore  bodies  of 
the  American  ranges.^ 

Most  important  of  all  the  well-known  deposits  in  Ontario 
are  those  in  the  northern  part  of  the  Province.  Of  these, 
the  Helen,  Josephine,  and  Magpie  Mines,  in  the  Michipi- 
coten  district,  produce  the  greatest  part  of  the  ore  mined  in 
the  Province.  The  Helen  Mine  deposit  is  approximately 
200  feet  deep,  400  feet  thick,  and  1000  feet  in  length;  and 

^  Canada,  Report  on  the  Mining  and  Metallurgical  Industries,  1908, 
p.  470. 

^  Jeans,  op.  cit.,  p.  107. 

'  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  202. 


32    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

produces  a  hematite  of  rather  high  grade  containing  little 
sulphur  or  phosphorus.^  The  Josephine  Mine  and  the 
Magpie  Mine,  each  a  few  miles  north  of  the  Helen  Mine, 
contain  ores  of  considerable,  though  unknown,  extent,  and 
of  promising  character.  At  Atikokan,  on  the  Canadian 
Pacific  Railway,  west  of  Port  Arthur,  a  deposit  of  magne- 
tite of  Bessemer  grade  has  been  located  and  worked.  The 
ore  is  high  in  sulphur  and  requires  roasting  before  being 
used  in  a  blast  furnace.  This  district  is,  however,  so  prom- 
ising as  to  have  warranted  the  expenditure  of  large 
amounts  of  money  for  exploration  by  important  American 
interests.-  East  of  Port  Arthur,  several  deposits  of  more  or 
less  value  occur.  At  Loon  Lake,  a  hematite  body  corre- 
sponding to  the  Mesaba  Range  of  Minnesota  has  been 
found.  This  deposit  is  favorably  situated  for  transporta- 
tion of  ores  to  Port  Arthur  either  by  rail  or  water.^  At 
Black  Sturgeon  River,  near  Lake  Nipigon,  hematite  ore 
has  been  discovered  and  considerable  areas  explored. 

The  most  important  recent  discovery  is  that  of  the 
Moose  Mountain  Range,  about  twenty-five  miles  north  of 
Sudbury.  This  affords  a  hard,  compact,  magnetite  con- 
taining a  greater  percentage  of  metal  than  the  hematite 
of  the  Helen  Mine.  The  ore,  of  which  there  is  possibly 
twice  as  much  as  at  the  Helen  Mine,  contains  little  phos- 
phorus and  sulphur  and  no  titanium.  A  rail  haul  of  eighty 
miles  brings  the  ore  to  Key  Inlet  on  Georgian  Bay.  The 
Minnesota  ores  have  to  be  hauled  farther  to  reach  Lake 
Superior  at  a  point  much  farther  west.  Ore  docks  have 
been  built  by  the  McKenzie  and  Mann^  interests  at  Key 
Inlet,  which  is  a  splendid  harbor,  capable  of  floating  the 
largest  Lake  vessels.^    Although  there  are  many  other 

^  C.  K.  Leith,  "Iron  Ores  of  Canada,"  Economic  Geology,  vol.  in,  pp. 
282-83. 

2  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  69. 

'  Engineering  and  Mining  Journal,  vol.  lxxx,  1906,  p.  119. 

^  Owners  of  the  Canadian  Northern  Railway. 

^  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  217. 


NATURAL  RESOURCES  32 

deposits  of  iron  in  northern  Ontario,  few  have  been  proved 
and  those  mentioned  are  as  yet  the  only  known  areas  of 
great  economic  value. 

A  few  beds  of  ore  have  been  located  in  eastern  Ontario. 
At  Radnor,  in  Renfrew  County,  a  magnetite  deposit  of 
fair  quality  and  quantity  is  being  operated.  Others  are 
found  at  Wilbur,  Lanark  County,  and  at  Bessemer  in  the 
northern  part  of  Hastings  County.  All  the  ore  produced 
at  these  mines  is  used  in  Canadian  furnaces  at  Midland, 
Hamilton,  and  Sault  Ste.  Marie  in  Ontario,  and  at  Rad- 
nor, Quebec.^  Many  other  deposits  occur  throughout  the 
Province,  which,  though  not  now  of  commercial  value, 
might  be  utilized  if  methods  of  concentration,  of  such  a 
nature  as  to  make  their  reduction  economically  possible, 
were  invented.  Considerable  attention  has  recently  been 
devoted  to  such  possibilities. 

§  12.  In  coal,  Ontario  is  apparently  entirely  lacking, 
although  it  has  been  suggested  that  the  many  peat-bogs  of 
the  Province  might  supply  a  substitute,  if  a  proper  furnace 
could  be  invented.^  This  lack  of  fuel  has  been,  naturally, 
Ontario's  greatest  drawback  in  the  development  of  her 
mineral  resources.  As  charcoal  is  no  longer  extensively 
used,  Ontario  is  now  forced  to  import  coke  or  coking  coal 
from  the  United  States  or  Nova  Scotia.  The  alternative, 
if  she  is  to  continue  her  iron  and  steel  industry,  will  be  to 
bend  her  efforts  toward  the  development  of  the  electro- 
metallurgic  method. 

It  has  been  an  axiom  that  the  development  of  the  iron 
industry  of  a  country  depends  more  on  its  richness  of  fuel 
resources  than  on  abundance  of  iron  ore.  In  the  making  of 
iron,  it  is  usually  necessary  to  transport  the  ore  to  the  fuel. 
Yet  this  maxim  is  not  universally  applicable.  The  prob- 
lem is  rather  complex  and  can  be  solved  only  by  weighing 

^  Ontario,  Report  of  Bureau  of  Mines,  1908,  pp.  221-25. 
'  Canada,  Geological  Survey,  1863-66,  p.  291. 


34    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  various  freight  factors  involved  in  getting  the  ore  and 
fuel  to  the  furnace  and  the  finished  product  to  the  market. 
It  sometimes  happens  that  the  fuel  is  carried  to  the  ore 
instead  of  the  ore  to  the  fuel.  This  is  apt  to  be  the  case 
when  the  coal  must  be  carried  toward  the  market  for  the 
finished  product.  It  would  seem,  then,  that  Ontario,  with 
her  rapidly  increasing  manufacturing  industry  of  every 
description,  can  probably  import  coke  or  coal  from  Nova 
Scotia  or  Pennsylvania  for  use  in  her  iron  industries, 
because  the  fuel  travels  to  the  Ontario  market  and  also 
toward  the  growing  market  of  the  great  Canadian  West.^ 
Low  freight  rates  on  westward  lake  and  railway  traffic  in- 
crease the  possibility  of  importing  coal  or  coke  for  an  iron 
industry  in  Ontario. 

§  13.  It  would  be  strange,  indeed,  if  the  ore  deposits  and 
coal-beds  of  Canada  were  confined  to  the  eastern  and  more 
developed  portions  of  the  country.  It  is  well  known  that 
Labrador  and  Ungava^  contain  valuable  and  extensive 
ore-beds.  Central  Ungava  contains  a  very  large  deposit  of 
hematite  and  magnetite,  but  it  is  so  far  from  transportation 
facilities  that  the  utilization  of  the  ore  cannot  be  expected 
for  a  long  time.  Similar  beds  are  found  on  the  west  shore 
of  Ungava  Bay,  and  on  the  islands  along  the  east  shore  of 
Hudson's  Bay.  The  long  distance  which  these  ores  would 
have  to  be  carried,  together  with  the  shortness  of  the  sea- 
son of  navigation,  is  a  serious  obstacle  to  profitable  work- 
ing. On  the  other  hand,  the  use  of  the  abundant  water- 
power  and  electrolytic  methods  might  make  possible  the 
local  reduction  of  the  ore,  providing  that  the  prospective 
Hudson's  Bay  Railway  opens  an  ever-increasing  market  in 
the  Canadian  West.^ 

,    *  Ontario,  Report  of  Bureau  of  Mines,  1908,  pp.  199-201, 

2  Now  northern  Quebec. 

^  A.  P.  Law,  "The  Iron  Ores  of  the  Labrador  Peninsula,"  Engineering 
Magazine,  vol.  xix,  p.  205. 


NATURAL  RESOURCES  35 

§  14.  Enthusiastic  Westerners  have  sometimes  declared 
that  the  West  itself  may  some  day  develop  an  iron  and 
steel  industry.  Evidence  presented  before  the  Senate  of 
Canada  shows  that  there  are  large  deposits  of  ore  along  the 
McKenzie  River,  and  it  is  well  known  that  Alberta  con- 
tains enormous  resources  of  low-grade  coal  and  some  of 
excellent  coking  quality.^  The  resources  on  the  mainland 
and  islands  of  British  Columbia  are  better  known.  On  the 
mainland,  ores  are  found  in  several  districts.  At  Cherry 
Bluff,  near  Kamloops,  an  out-crop  of  ore  appears.  Up  to 
the  present,  however,  the  ore  has  been  used  for  fluxing 
purposes  only,  at  Nelson,  Tacoma,  and  Revelstoke.^  A 
deposit  of  red  hematite  of  considerable  quantity  has  been 
found  in  the  Cariboo  district,  but  it  is  too  remote  from 
railroad  and  other  means  of  communication  to  be  of  great 
commercial  value.^  A  few  other  deposits  have  been  located 
on  the  mainland,  but  they  are  usually  of  little  economic 
value  because  of  lack  of  transportation  facilities,  or  because 
they  are  of  inferior  quality  or  small  in  quantity. 

If  British  Columbia  is  to  have  any  important  iron  and 
steel  industry,  it  must,  therefore,  look  to  other  more  avail- 
able resources  on  the  coast,  and  these  may  possibly  be 
found  on  Vancouver  and  Texada  Islands.  Vancouver 
Island  offers  several  important  resources.  There  are  a  few 
properties  of  which  the  surface  indications  are  so  promising 
that  the  deposits  may  become  the  object  of  development  in 
the  near  future.  Among  these  are  the  deposits  at  Sooke 
Harbor,  near  Victoria,  those  near  the  Gordon  River,  those 
on  Copper  Island,  those  near  Barkley  Sound,  those  near 
Head  Bay,  and  especially  those  on  the  Klaanch  River. 
Some  ores  are  too  irregular;  others  are  not  sufficiently 
extensive.  Few  are  far  from  water  transportation,  and 
excellent  harbors  are  furnished  by  the  numerous  indenta- 

*  Canada,  Canada's  Fertile  Northland,  1907,  p.  20. 

*  Canada,  Report  on  the  Mining  and  Metallurgical  Industries,  1908,  p.  216. 
s  Ibid.,  p.  219. 


36    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

tions  of  the  coast.  In  general,  the  ores  varying  from  52  to 
66  per  cent  in  metal  are  of  very  satisfactory  grade.  Phos- 
phorus is  not  present  in  prohibitive  quantities,  as  a  rule, 
but  the  percentage  of  sulphur  often  necessitates  roasting 
the  ores  previous  to  their  reduction.^ 

Besides  these  somewhat  undeveloped  ores  of  Vancouver 
Island  are  the  well-known  deposits  of  Texada  Island. 
There  is  every  probability  that  large  quantities  of  mer- 
chantable magnetite  exist  here.  The  known  deposits  are 
situated  close  to  the  water-front,  and  a  little  bay  offers 
good  shipping  facilities.  From  none  of  the  claims  has  the 
ore  to  be  transported  more  than  a  mile  and  a  half  to  water. 
The  ore  ranks  high  in  quality,  containing  from  59  to  64 
per  cent  of  iron,  while  the  phosphorus  content  is  very  low. 
The  high  proportion  of  sulphur,  the  only  objectionable 
feature,  is  removable  by  roasting.^ 

Nor  is  British  Columbia  unsupplied  with  fuel.  On  Van- 
couver Island  there  are  now  two  coal  companies  in  active 
operation  capable  of  producing  a  large  output,  if  necessary. 
One  of  them  also  produces  coke  of  splendid  metallurgical 
qualities.  As  the  coal-beds  are  near  tidewater,  coal  can 
be  quickly  and  cheaply  transported  to  the  market.  There 
are  also  many  beds  of  coal  on  the  mainland.  For  the  pres- 
ent, however,  the  Crow's  Nest  Pass  district  has  the  mo- 
nopoly of  coking  coal,  since  the  coal  from  other  beds  con- 
tains too  much  sulphur  to  produce  coke  of  the  desired 
quality.^  Of  course,  this  district  includes  the  Lethbridge 
district  of  Alberta,  opened  several  years  ago  by  the  south- 
ern branch  of  the  Canadian  Pacific  Railway. 

§  15.  Information  concerning  the  extent  and  character 
of  Canadian  iron  ore  deposits  is  necessarily  fragmentary, 

*  E.  Lindemann,  Iron  Ore  Deposits  of  Vancouver  and  Texada  Islands, 
pp.  8-21. 

2  Ibid.,  pp.  21-24. 

'  Canada,  Report  on  the  Mining  and  Metallurgical  Industries,  1908, 
pp.  261-«4i. 


NATURAL  RESOURCES  37 

since  comparatively  little  work  of  investigation  has  been 
carried  on  as  yet.  It  is  quite  impossible  to  give  figures 
which  will  convey  even  an  approximate  idea  of  what  may 
be  called  iron  ore  reserves.  In  older  countries  the  study  of 
iron  ore  deposits  has  been  conducted  for  years,  even  centu- 
ries, and  in  such  cases  it  is  justifiable  to  present  figures 
which  may  be  claimed  to  represent  close  approximations. 
But  until  lately  Canadian  deposits  have  not  attracted  the 
attention  to  which  they  seem  entitled,  and  the  information 
available  is  on  the  nature  and  character  of  ores  and  on  the 
modes  of  occurrence  as  shown  by  surface  indications, 
rather  than  on  the  volume  and  extent  of  ore  supplies  as 
shown  by  systematically  conducted  studies  of  actual 
workings  and  developments.  A  beginning  in  the  direction 
of  systematic  surveys  was  made  by  the  inauguration  of  the 
Mines  Branch  of  the  Dominion  Department  of  Mines, 
under  the  direction  of  Dr.  Eugene  Haanel. 

There  is  very  little  doubt  that  Canada's  failure  to  take 
her  place  among  the  important  iron  ore-producing  coun- 
tries of  the  world  is  due  to  the  lack  of  knowledge  con- 
cerning its  iron  resources,  and,  to  a  certain  extent,  to  the 
comparatively  limited  home  market,  rather  than  to  lack 
of  workable  deposits.  By  far  the  greater  part  of  Canada's 
3,600,000  square  miles  is  "terra  incognita"  as  regards  its 
mineral  resources,  or  even  its  general  geological  features. 
The  futility  of  attempting  even  roughly  to  estimate  Can- 
ada's share  in  "an  approximation  of  the  world's  supply  of 
iron  ore"  is  apparent.  The  deposits  reviewed  so  briefly  are 
all  in  the  older  and  more  or  less  settled  and  known  regions. 
New  iron  ore-bearing  districts  will  almost  certainly  be  dis- 
covered as  the  settlement  of  the  country  proceeds,  and  it  is 
not  improbable  that  they  will  prove  to  be  incomparably 
larger  than  the  present  known  resources.^ 

1  The  Iron  Ore  Resources  of  the  World,  1910,  pp.  719-22. 


PART   TWO 

THE  IRON  INDUSTRY  OF  CANADA  PRIOR  TO 

THE  ADOPTION  OF  THE  NATIONAL 

POLICY  IN  1879 


CHAPTER  III 

THE   HISTORY   OF   THE   INDUSTRY 

§  1.  As  we  have  already  suggested,  the  history  of  Iron 
smeltmg  in  Canada  has  not  been,  until  the  last  few  years,  a 
brilliant  one.  The  industry  had  an  early  beginning,  how- 
ever, and  unceasing  efforts  have  been  put  forth  to  establish 
it  permanently  on  Canadian  soil.  Yet  many  of  these  at- 
tempts have  resulted  in  failures.  The  story  of  the  failures 
and  the  successes,  their  causes  and  conditions,  prior  to  the 
establishment  of  the  national  policy  in  1879,  is  the  theme 
of  the  two  following  chapters.  For  convenience  a  chrono- 
logical treatment  of  the  history  of  the  industry  in  the 
different  Provinces  will  be  followed. 

§  2.  As  with  most  "first  things"  in  Canada,  the  first 
iron  furnace  was  located  in  Quebec.  Although  the  manu- 
facture of  pig  iron  in  Quebec  has  never  assumed  any  great 
importance,  from  very  early  periods  pig  iron  of  high  qual- 
ity has  been  produced  in  the  French  Province. 

The  earliest  attempt  at  production  on  record  is  that  car- 
ried on  for  a  long  period  of  years  at  St.  Maurice  Forges, 
near  Three  Rivers,  on  the  St.  Lawrence  River.  Ore  was 
discovered  there  as  early  as  1667,  and  was  probably  known 
earlier  to  the  Indians  and  Jesuits.  Colbert,  anxious  to  dis- 
cover iron  ore  in  New  France,  had  caused  some  explora- 
tions to  be  made  in  1667,  resulting  in  the  discovery  of  de- 
posits at  Three  Rivers,  but  they  were  reported  as  offering 
nothing  advantageous  in  either  quality  or  quantity.^   In 

^  F.  C.  Wurtelle,  "Historical  Record  of  St.  Maurice  Forges,"  Proceed- 
ings and  Transactio7is  of  the  Royal  Society  of  Canada,  vol.  rv',  sec.  2,  p.  78. 
For  the  geographical  location  of  the  plants  mentioned  see  the  maps  in  the 
Appendix. 


42    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1672  Count  de  Frontenac  reported  that  he  had  commenced 
to  mine  ore,  and  strongly  urged  the  establishment  of  forges 
and  a  foundry/  In  1685  French  ironworkers  declared  a 
sample  to  be  of  good  quality  and  percentage.^  Another 
report,  in  1706,  urged  the  development  of  these  natural 
resources.  Lack  of  skilled  workmen  and  suitable  water 
power,  and  the  absence  of  a  sufficient  market  for  the  prod- 
uct, seem  to  have  postponed  further  developments. 

It  was  not  until  1730  that  Louis  XV  gave  a  royal  license 
to  M.  Francheville  to  work  the  iron  ores  of  the  St.  Maurice 
vicinity  and  advanced  ten  thousand  livres  for  aid  in  erect- 
ing a  furnace.  However,  deeds  and  rights  were  surrendered 
to  the  Crown  in  1735.  In  1736  Cugnet  et  Compagnie,  or 
La  Compagnie  des  Forges,  were  advanced  ten  thousand 
livres  and  were  empowered  to  erect  ironworks  on  condition 
that  a  blast  furnace  be  built  immediately.^  When,  in  1737, 
Cugnet  et  Compagnie  claimed  that  they  were  in  want  of 
wood  and  that  if  they  had  to  buy  it  from  the  habitants  they 
would  be  compelled  to  pay  ruinous  prices,  the  intendant 
granted  them  the  fief  of  St.  Etienne^  for  a  time.  The  firm 
made  cannon  and  mortars,  iron  stones,  kettles  and  bars, 
and  also  tried  to  make  steel,  but  could  not  bring  it  to  per- 
fection because  no  one  was  acquainted  with  the  best 
method  of  preparing  it,^  In  1739  they  brought  from  France 
a  skilled  artisan  who  possessed  knowledge  of  the  different 
branches  of  manufacturing  wrought  and  cast  iron,  as  well 
as  of  the  working  of  mines,  and  the  works  and  methods  of 
working  were  improved.  Finally,  the  company,  through 
lack  of  capital,  was  forced  to  give  up. 

When,  in  1743,  the  Crown  again  took  possession,  the 
works  were  operated  on  the  king's  account.  Skilled  work- 

^  J.  H.  Bartlett,  "Manufacture  of  Iron  in  Canada,"  Transactions  and 
Papers  of  American  Institute  of  Mining  Engineers,  1895,  pp.  508-10. 
2  J.  M.  Swank,  Iron  in  All  Ages,  p.  348. 
2  Bartlett,  op.  cit.,  pp.  510-11. 
^  Wurtelle,  op.  cit.,  p.  80. 
^  Peter  Kalm,  Travels  in  North  America,  vol.  in,  p.  89. 


THE  HISTORY  OF  THE  INDUSTRY  43 

men  were  sent  out  from  France,  the  blast  fm-nace  was 
partly  rebuilt,  and  additions  were  made.  When  the  forges 
were  visited  by  M.  Franquet  in  1752,  they  had  assumed 
very  considerable  proportions.^  Water  power  ran  the 
machinery  and  about  180  French  soldiers  of  the  Three 
Rivers  garrison  were  the  principal  workmen.  The  ore  used 
was  rich  and  tolerably  clean.  Charcoal,  the  only  fuel,  was 
secured  in  the  neighborhood  in  great  abundance.  The 
boiling  metal  was  put  in  a  gutter  of  sand  and  moulded  into 
stoves,  pots,  and  kettles,  or  cooled  and  hammered  into  bars. 
The  iron  was  of  excellent  quality,  soft,  pliable,  and  tough. ^ 
M.  Franquet  dweU  on  the  necessity  of  greater  economy  at 
the  forges  and  the  advisability  of  sending  out  more  compe- 
tent operatives  and  furnace-men  from  France.  As  improve- 
ment was  effected  in  the  manufacture  of  iron  between  1752 
and  1759,  many  of  his  suggestions  probably  were  acted 
upon.  Yet  a  great  number  of  useless  people  on  large  sala- 
ries, such  as  a  director,  a  comptroller,  a  treasurer,  a  con- 
tractor for  the  forges,  several  overseers,  a  chaplain,  and 
others,  besides  waste  and  extravagance  combined  with  fraud, 
connived  at  by  those  who  passed  the  accounts,  rendered 
the  establishment  unprofitable  and  even  burdensome  to 
the  Crown.* 

Moreover,  the  forges  produced  more  iron  than  the  colony 
could  consume,  and,  although  some  was  exported  to  France, 
the  authorities  were  not  convinced  that  it  was  fit  for  fire- 
arms. A  naval  establishment  for  Canada,  and  the  use  of 
iron  in  composite  shipbuilding,  were  proposed.  Though 
orders  were  given  for  the  erection  of  docks  at  Quebec, 
nothing  was  actually  accomplished.^ 

In  1760  Canada,  and  with  it  the  St.  Maurice  Forges, 
passed  into  the  possession  of  Great  Britain.  For  one  hun- 

^  Bartlett,  op.  cit.,  p.  511.  ^  Swank,  op.  cii.,  p.  350. 

'  Wurtelle.  op.  cit.,  p.  823. 

*  Bartlett,  op.  cit.,  p.  515.  Quoted  from  Russel's  History  of  North 
America,  bk.  iv,  p.  372. 


44      THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

dred  years  the  forges  were  leased  to  various  companies  and 
operated  with  more  or  less  success,  i  From  1761  to  1763 
they  were  used  for  converting  unserviceable  ordnance  into 
bar  iron.  Production  was  usually  carried  on  to  advantage, 
but  it  was  a  troublesome  undertaking  not  congenial  to 
military  men.^  The  works  may  or  may  not  have  been 
operated  do^v^l  to  1767,  when  the  CrowTi  leased  the  tract  of 
land  and  plant  for  sixteen  years  at  a  rental  of  £25  per 
annum.  Repairs  were  made,  buildings  erected,  and  a  great 
quantity  of  iron  was  turned  out  with  success.' 

It  appears  that,  when  the  American  invasion  of  1776 
occurred,  one  member  of  the  partnership  helped  the  invad- 
ers with  both  goods  and  money.  He  cast  shot  and  shell  to 
be  used  in  the  siege  of  Quebec  and  finally  ran  off  to  the 
United  States,  taking  with  him  all  the  funds  and  the 
vouchers  for  the  goods  advanced  to  the  Americans.  Hav- 
ing cashed  the  vouchers,  amounting  to  about  $10,000,  he 
sailed  for  France.  The  company,  however,  managed  to 
recover  by  dint  of  hard  work,  and  continued  operations  till 
the  expiration  of  its  lease. 

In  1783  the  works  were  again  leased  for  a  sixteen-year 
period,  and  subsequently  passed  through  the  hands  of  a 
series  of  partnerships.*  In  1809  the  manufacture  of  iron 
was  the  most  important  manufacturing  industry  in  the 
country,  and  there  was  a  considerable  export  of  cast-iron 
articles,  particularly  stoves.^  In  1831  the  establishment 
consisted  of  every  convenience,  furnaces,  forges,  foundries, 
workshops,  houses,  and  other  buildings.  Supplies  to  be 
used  in  the  Province,  such  as  large  potash  kettles,  machines 
for  mills,  various  kinds  of  casts,  a  superior  quality  of 
wrought  iron,  were  the  principal  articles  manufactured,  and 
a  quantity  of  pig  and  bar  iron  was  produced  for  exporta- 
tion.  Two  hundred  and  fifty  to  three  hundred  men  were 

»  Wurtelle,  op.  cit.,  p.  84.  ^  Bartlett,  op.  cit.,  pp.  515-16. 

^  Wurtelle,  op.  cit.,  p.  85.  *  Bartlett,  op.  cit.,  p.  516. 

^  Hugh  Gray,  Letters  from  Canada,  p.  22. 


THE  HISTORY  OF  THE  INDUSTRY  45 

employed  in  the  works.  Of  these  the  overseers  and  em- 
ployees in  the  model  department  were  English  and  Scotch, 
and  the  unskilled  workmen  generally  Canadians.^ 

In  1846  the  Cro\\Ti  sold  the  forges  to  Henry  Stuart,  of 
Montreal,  who,  in  turn,  leased  them  to  James  Ferrier  by 
whom  they  were  worked  until  1851.  Stuart  then  sold  his 
interest  to  Andrew  Stuart  and  John  Porter,  of  Quebec. 
These  men  abandoned  the  enterprise  because  of  the  grow- 
ing scarcity  of  ore  and  charcoal  in  the  neighborhood.  When 
Henry  Stuart  had  purchased  the  property,  he  paid  very 
little  down,  and  the  balance  was  never  paid.  In  1861  the 
Crown  therefore  sold  the  property,  together  with  a  farm, 
for  $7000,  The  purchaser  sold  the  furnace,  works,  houses, 
cottages,  and  water  privileges  for  $1700  to  John  McDougall 
in  1862,  and  he  sold  the  land  to  squatters  and  settlers,  who 
supplied  the  ore  and  wood  to  the  forges,  which  !Mr. 
McDougall  once  more  put  in  operation.  As  the  product 
was  used  chiefly  for  the  manufacture  of  car  wheels,  the 
trade  in  stoves  and  kettles  fell  off.^ 

In  the  seventies,  however,  ore  of  inferior  quality  had  to 
be  used,  and  the  wood  yielded  an  unusually  small  amount 
of  charcoal.  The  supply  of  bog  ore  which  had  to  be  drawn 
from  four  to  nine  miles  was  almost  exhausted  by  1874. 
Limestone  had  to  be  carried  several  miles  at  a  cost  of  one 
dollar  per  ton.  While  the  iron,  soft,  tough,  clean  and  close 
in  texture,  and  possessing  fine  chilling  qualities  was  of  un- 
doubted merit  and  in  great  demand  for  making  car  wheels 
and  axles,  the  supply  of  ore  and  wood  was  rapidly  dis- 
appearing. An  attempt  to  smelt  the  magnetites  of  Leeds 
County  was  unsuccessful  because  the  furnace  was  not  the 
proper  kind  and  the  operators  were  inexperienced  in  treat- 
ing other  than  bog  ores.^  Consequently,  although  the  fur- 
nace was  still  making  good  charcoal  iron  in  1879,  it  was 

1  Bartlett,  op.  ciL,  p.  516.  ^  /^.^  p.  517^ 

'  J.  B.  Harrington,  "Notes  on  Iron  Ores  of  Canada  and  their  Develop- 
ment," in  Canada,  Geological  Survey,  1873-7-i,  p.  2-18. 


46      THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

abandoned  in  1883,  at  which  time  it  was  the  oldest  active 
furnace  on  the  continent,  i 

Although  writers  have  always  given  special  attention  to 
this  historic  endeavor  at  St.  Maurice,  nevertheless,  many 
other  attempts  to  smelt  Quebec's  numerous  ores  have  been 
made.  In  1798  a  blast  furnace,  casting  house,  two  forges, 
workshops,  and  dwelling  houses  were  built  on  the  east  side 
of  the  Bastican  River,  in  Champlain  County.  They  were 
in  operation  for  some  time.  Reports  show  that  both  ore 
and  wood  were  more  plentiful  than  at  St.  Maurice,  but  the 
proprietor  died  and  the  plant  was  abandoned.^  In  1857  the 
Canada  Iron  and  Manufacturing  Company  of  Montreal 
built  a  blast  furnace  at  Hull,  near  Ottawa,  and  for  two 
years  produced  a  superior  quality  of  pig  iron;  but  because 
of  the  high  cost  of  charcoal,  excess  of  sulphur  in  the  ore, 
and  improper  management,  the  economic  results  were  not 
satisfactory.  Operations  were  stopped,  and  the  furnace, 
having  been  much  injured  by  a  forest  fire,  was  abandoned 
a  few  years  later.^ 

About  the  same  time  the  Radnor  Forges,  at  Fernion  in 
Champlain  County,  approximately  ten  miles  from  Three 
Rivers,  were  erected  by  Messrs.  Larue  and  Company.  The 
establishment  consisted  of  a  blast  furnace,  forge,  and  large 
rolling  mill,  a  car-wheel  foundry  in  Three  Rivers,  and 
40,000  acres  of  freehold  timber  and  ore  lands.  The  crude 
bog  ore  which  was  brought  to  the  furnace,  partly  by  the 
workmen  of  the  company,  and  partly  by  the  farmers  on 
whose  land  it  was  found,  yielded  40  to  50  per  cent  metal, 
when  washed  free  of  adhering  earth.  Limestone,  secured 
in  the  vicinity,  was  used  as  flux.  A  refractory  sandstone 
was  used  for  the  furnace  hearths.  In  1863  about  2000  tons 
of  cast  iron  were  produced.  In  digging  up  and  bringing  the 
ore  to  the  furnace  and  in  preparing  and  transporting  the 
charcoal  about  200  to  400  men  were  employed. 

1  Swank,  op.  cit.,  pp.  350-51.  *  Bartlett,  op.  cit.,  p.  518. 

'  Harrington,  op.  cit.,  pp.  73-74. 


THE  HISTORY  OF  THE  INDUSTRY  47 

The  chief  product  of  the  company  was  cast-iron  wheels 
for  railway  cars.  For  this  the  metal  was  very  well  adapted. 
Wrought  iron  was  also  produced.  When  the  rolling  mill 
and  forges  were  destroyed  by  fire,  only  the  forges  were 
rebuilt,  and  the  iron  was  sent  to  the  car-wheel  foundry  at 
Three  Rivers.^  The  lack  of  railroad  facilities,  which  pre- 
vented supplies  from  being  carried  more  than  seven  miles, 
and  which  handicapped  the  proprietors  in  finding  a  market 
for  the  product,  together  with  bad  management  and  disas- 
trous fires,  contributed  to  the  failure  of  the  plant  in  the 
early  seventies.^ 

In  1867  the  Moisic  Iron  Company  was  formed  to  work 
the  iron  sands  on  the  north  shore  of  the  Gulf  of  St.  Law- 
rence. As  Mr.  Molson,  of  Montreal,  had  treated  the  ore 
successfully  by  the  bloomary  process  in  northern  New 
York,  he  erected  several  bloomary  furnaces  at  Moisic,  near 
Montreal.  Iron  sands  were  used  as  ore,  and  charcoal  as 
fuel.  The  product  was  sent  to  the  United  States  or  used  at 
Monti^eal  at  a  rolling  mill  built  by  the  company  in  1874. 
But  in  June,  1872,  following  a  protest  from  American  iron- 
masters, a  duty  of  $15  per  ton  was  placed  on  Moisic  iron 
at  a  time  when  the  rate  on  ordinary  pig  iron  was  reduced 
from  $7  to  $6.30  per  ton.^  Before  the  special  duty  was 
repealed  in  1875,  and  Moisic  iron  admitted  at  the  ordinary 
rate,^  the  company  was  compelled  to  shut  down  the  plant 
and  to  go  into  liquidation.  At  this  time  there  was  no 
demand  in  Canada  for  a  large  output  of  this  class  of  iron. 
Since  the  importation  of  British  goods  was  seriously  de- 
pressing the  market,^  and  there  was  a  downward  move- 
ment of  prices  in  the  United  States,  the  price  of  iron  fell 
rapidly  in  Canada  after  1873,^ 

1  Canada,  Geological  Survey,  1863,  pp.  686-87. 
^  Canadian  Engineer,  vol.  ii,  pp.  4r-5. 
'  United  States  Statutes,  vol.  17,  chap.  315,  sees.  4-5. 
*  Ibid.,  vol.  18,  chap.  36,  see.  6.  ^  Bartlett,  op.  cit.,  p.  521. 

®  See  Appendix  H.  No.  1  foundry  pig  iron  fell  in  price  from  $42  a  ton 
in  1873;  to  $30  in  1874;  to  $25  in  1875. 


48      THE  CANADIAN  IRON  AND  STEEL  INDUSTRY^ 

The  St.  Francis  River  Mining  Company  erected  a  blast 
furnace  in  the  county  of  Yamaska,  near  Riviere  aux 
Vaches  in  1869,  and  produced  charcoal  pig  iron  until  1873. 
The  property  was  purchased  by  Messrs.  McDougall  and 
Company,  and  operated  till  1880,  when,  owing  to  the  ex- 
haustion of  the  bog  ores  within  paying  distance  from  the 
furnace,  it  was  dismantled.^ 

In  the  winter  of  1873  the  Haycock  Iron  Mine,  eight  miles 
northeast  of  Ottawa,  was  opened,  and  5000  tons  of  ore 
raised.  Works,  consisting  of  a  bloomary  forge,  a  steam 
hammer,  engines,  pumps,  workmen's  cottages,  and  a  saw- 
mill, were  built.  Some  blooms  of  fine  quality  were  made 
and  exported  to  England,  but  for  some  reason  the  enter- 
prise was  not  a  commercial  success  and  the  place  was  soon 
closed.^ 

The  Canada  Titanic  Iron  Company,  formed  as  the  result 
of  the  discovery  of  titaniferous  ore  about  sixty  miles  below 
Quebec  in  1871,  built  two  blast  furnaces,  extensive  build- 
ings, and  a  railway  from  the  works  to  Baie  St.  Paul,  in 
1873.^  Good  pig  iron  was  made,  but  the  enterprise  was  not 
a  profitable  one.^  Not  only  was  the  ore  high  in  sulphur, 
phosphorus,  and  chromium,  but  the  titanium  proved  to  be 
of  no  special  value  to  the  iron  and  necessitated  the  use  of 
190  to  200  bushels  of  charcoal  per  ton  of  pig  iron  produced. 
An  admixture  of  other  ores  was  necessary  to  reduce  the 
proportion  of  titanium  and  the  consumption  of  fuel.^  In- 
stead of  producing  60  tons  a  week,  as  was  expected,^  the 
first  furnace  produced  only  26  tons  of  pig  iron  in  the  first 
week,  20  tons  in  the  second,  and  18  in  the  third.  The  enter- 
prise was  soon  abandoned,  and  the  plant  was  dismantled 
in  1880.^ 

1  Bartlett,  op.  cit.,  p.  520.  ^  7^,^.^  p.  522. 

^  Harrington,  op.  cit.,  p.  251. 

*  Journal  of  the  Iron  and  Steel  Institute,  1876,  no.  1,  p.  190. 

^  Harrington,  op.  cit.,  p.  251. 

^  Journal  of  the  Iron  and  Steel  Institute,  1874,  no.  1,  p.  18i. 

^  Bartlett,  op.  cit.,  p.  520. 


THE  HISTORY  OF  THE  INDUSTRY  49 

Another  blast  furnace,  built  by  Messrs.  McDougall  & 
Company,  at  L'Islet,  about  four  miles  from  their  works  at 
St.  Maurice,  was  abandoned  before  1879. ^ 

In  1870  another  attempt  was  made  to  smelt  the  iron 
sands  of  Quebec.  Steel-works  were  erected  in  Quebec  for 
the  direct  manufacture  of  steel  from  these  high-grade  ores. 
A  well-constructed  Siemens  regenerative  furnace  was  used. 
In  making  steel,  the  sand,  purified  by  a  magnetic  concen- 
trating machine,  was  mixed  with  tar  and  charcoal  powder 
in  a  box  and  the  mixture  was  pressed  into  square  bricks. 
These  were  then  piled  upon  the  furnace  hearth  and  melted 
down  to  steel,  which  was  finally  tapped  off  into  ingots. 
Difficulty  seems  to  have  been  experienced  in  obtaining  a 
regular  and  homogeneous  product.  Pouring  gave  a  good 
deal  of  trouble.  The  ingots  were  frequently  honeycombed, 
and  the  forge  products  were  liable  to  contain  flaws.  The 
defects  which  led  to  failure  would  have  been  evident  to  a 
skilled  metallurgist,  and  might  have  been  overcome  by 
him,  but  these  operations  were  conducted  by  a  man  who 
knew  nothing  either  of  the  theory  or  practice  of  steel- 
making.  As  a  consequence,  nothing  was  accomplished  and 
the  works  were  abandoned.^ 

§  3.  Ontario  has  endeavored  to  establish  the  iron  indus- 
try at  several  periods  in  her  history.  The  first  attempt  to 
manufacture  iron  was  made  as  early  as  1800  at  Lyndhurst, 
then  called  Furnace  Falls,  on  the  Gananoque  River,  in 
Leeds  County.  Water  power  was  used  to  drive  the  machin- 
ery and  to  work  the  blast.  The  ore,  which  had  to  be  drawn 
a  considerable  distance,  was  of  inferior  quality  and  insuffi- 
cient quantity.  At  one  time  an  attempt  was  made  to  cast 
pots  and  kettles  for  the  use  of  settlers.  After  two  years' 
trial,  the  venture  proved  a  commercial  failure  and  was 
given  up.  A  forge  for  the  manufacture  of  bar  iron,  built  at 
about  the  same  time  for  the  same  company,  was  in  opera- 

1  Bartlett,  op.  cit.,  pp.  521-22.       «  Monetary  Times,  vol.  ii,  p.  502. 


^     THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

tion  until  1812.  On  account  of  the  lack  of  capital  and 
derangement  of  business  during  the  war,  the  place  was  shut 
dowTi  and  never  opened  again. 

The  next  attempt  was  made  in  western  Ontario  at 
Normandale  (then  known  as  Potter's  Creek),  in  the  county 
of  Norfolk,  near  Lake  Erie.  In  1815  John  Mason,  an  Eng- 
lishman, started  to  build  a  furnace  to  smelt  the  bog  ores  of 
the  district.  A  creek  furnished  all  the  required  power,  and 
Lake  Erie  was  convenient  for  shipping  the  product  to  any 
po:  ts  along  the  shore,  or  for  receiving  any  supplies  that 
might  be  required.  Moulding  sand  was  abundant  on  the 
site  of  the  furnace  and  a  great  variety  of  timber  for  char- 
coal was  easily  obtained.  The  high  price  of  iron  was  another 
favorable  incentive.  But  the  bog  ore  was  widely  scattered 
in  very  small  bodies.  Further,  it  required  many  experi- 
ments to  know  the  best  method  of  working  the  ore,  and,  in 
addition,  the  few  men  in  the  country  capable  of  working 
the  furnace  were  independent  and  unruly.  Unfortunately, 
the  Government  gave  no  aid,  and  when,  after  a  few  tons  of 
iron  had  been  produced,  the  inner  wall  of  the  furnace  gave 
way,  the  project  was  temporarily  abandoned. 

In  1820  the  property  was  purchased  by  Mr.  Joseph  Van 
Norman,  who,  in  1821,  formed  a  partnership  and  built  a 
new  blast  furnace  at  an  expense  of  $8000.  The  product 
was  of  excellent  quality.  With  eight  or  nine  tons  of  bog  ore 
secured  from  the  marshes  and  swamps  within  a  distance  of 
twelve  miles,  about  three  tons  of  pig  iron  were  produced. 
The  furnace,  which  was  in  blast  about  eight  or  nine  months 
per  year,  running  night  and  day,  produced  700  to  800  tons 
of  iron  at  an  annual  consumption  of  4000  cords  of  hardwood 
made  into  charcoal  in  the  usual  way. 

In  the  early  stage  of  the  enterprise,  the  iron  was  con- 
verted into  various  kinds  of  castings,  for  there  was  no 
market  for  the  pig  iron.  Even  before  the  opening  of 
the  Welland  Canal  in  1829,  stoves,  kettles,  and  other 
iron  goods  were  sent  very  long  distances,  particularly  in 


THE  HISTORY  OF  THE  INDUSTRY  51 

winter.  The  wares  produced  were  disposed  of  along  the 
shores  of  Lake  Erie  and  taken  into  the  interior  by  teams. 
Afterward  towns  on  the  canal  and  ports  on  Lakes  Erie  and 
Ontario  were  accessible  by  water  and  two  vessels  were  kept 
busy  during  the  summer  months.  Hamilton,  Toronto,  and 
Port  Hope  were  thus  supplied,  and  from  these  centers 
wares  were  distributed  into  the  back  country.  Some  goods 
were  sent  as  far  as  Montreal.  Since  the  country  was  over- 
stocked at  times,  some  of  the  product  was  exported  to 
Buffalo  and  even  to  Chicago,  as  well  as  to  other  Lake  ports. 
The  business  seemed  to  be  suited  to  the  Province  and  was 
started  at  the  right  time  to  be  of  use  to  the  new  settlers 
in  furnishing  sugar-kettles  and  kettles  for  boiling  ashes. 
There  was  in  those  days  little  money  in  the  country,  and 
business  was  carried  on  largely  by  barter.  Anything  the 
people  had  to  sell  was  brought  to  the  furnace  and  exchanged 
for  the  wares,  or  due-bills  payable  in  ironware.  At  one 
time  the  books  of  the  establishment  showed  outstanding 
over  $30,000  of  these  due-bills  for  iron. 

In  1826  Mr.  Van  Norman  bought  out  his  partners  in 
favor  of  his  brother.  The  business  was  carried  on  till  1847, 
when  the  plant  was  abandoned,  because  of  the  exhaustion 
of  fuel  and  ore  in  the  neighborhood.  The  firm  also  owned 
a  forge  at  Port  Dover,  where  for  some  years  bar  iron  for 
horse-  and  sleigh-shoes ^  was  manufactured. 

The  township  of  Marmora,  in  Hastings  County,  has  long 
been  noted  for  its  iron  ores.  Ironworks  were  first  started 
there  about  1830  by  a  Mr.  Hayes,  who,  after  spending  a 
fortune,  gave  up  the  property  to  his  creditors.  The  works 
were  carried  on  for  a  time  in  the  interest  of  the  Honorable 
Peter  McGill,  the  chief  creditor,  but  at  a  hea\y  financial 
loss.  In  1847  Mr.  Van  Norman  visited  the  works,  and, 
tempted  by  the  appearance  of  great  ore-beds,  purchased 
the  property  for  $21,000.  After  a  large  sum  had  been  ex- 
pended in  fitting  up  the  furnace,  putting  in  machinery, 
1  Bartlett,  op.  cit.,  pp.  524-27. 


52    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ovens,  blowing  apparatus,  erecting  and  repairing  buildings, 
cutting  cordwood  and  making  it  into  charcoal  for  fuel,  the 
furnace  was  finally  started  in  1848.  The  result  was  a  bitter 
disappointment;  for,  after  being  accustomed  to  using  an 
easily  reduced  bog  ore,  Mr.  Van  Norman  now  had  to  treat 
a  hard,  though  rich,  rock  ore.  A  large  amount  of  charcoal 
had  to  be  used  and  nothing  but  loss  attended  every  effort. 
After  the  iron  was  made,  it  had  to  be  carted  thirty-two 
miles  to  Belleville,  over  roads  so  rough  that  the  wagons 
were  constantly  in  danger  of  breaking  down.  A  road  was 
therefore  opened  to  Healey's  Falls  on  the  river  Trent,  a  dis- 
tance of  nine  miles;  and  the  iron  was  taken  from  there  to 
Rice  Lake  by  steamboat  and  then  carted  twelve  miles  to 
Cobourg  on  Lake  Ontario. 

At  this  time  iron  ranged  in  price  from  $30  to  $36  per 
ton,  and  found  a  ready  sale  at  these  prices.  In  1848  a  rapid 
drop  in  the  price  of  iron  in  England,  together  with  the  re- 
duction of  transportation  rates  that  followed  the  opening 
of  the  St.  Lawrence  canals,  settled  the  question  of  making 
pig  iron  at  Marmora  for  Mr.  Van  Norman,  who  had  to  stop 
the  works  and  lost  most  of  his  investment. 

The  next  proprietors  were  local  people  from  Belleville 
who  formed  the  Marmora  Foundry  Company.  Many  im- 
provements were  made  at  an  expense  of  probably  $20,000. 
Pig  iron  of  very  superior  quality  was  produced  at  a  cost  not 
exceeding  $15  per  ton.  The  ore  was  rich;  and  three  tons 
yielded  a  ton  of  iron.  Excellent  as  was  the  cast  iron  made 
from  it,  the  toughness  and  ductility  of  the  pig  iron  made  it 
still  more  suitable  for  making  bar  iron.  But  owing  to  some 
difficulty  over  the  payment  of  stock  dues  by  certain  stock- 
holders, the  works  were  stopped  after  the  first  experiment. 

In  1856  an  English  company  came  into  the  field.  Mr. 
Vernon  Smith,  who  had  just  left  furnaces  at  Woodstock, 
New  Brunswick,  was  in  charge.  He  rebuilt  the  old  furnace 
and  built  a  new  one  cased  with  iron.  But  apparently  the 
manager  did  not  know  how  to  treat  the  ores  and  the  plant 


THE  HISTORY  OF  THE  INDUSTRY  53 

was  constantly  behind  the  times.  When  the  hotblast  treat- 
ment and  other  new  processes  were  materially  reducing 
costs  in  Great  Britain,  the  old  mode  of  smelting  by  cold 
blast  was  continued  here;  the  manufacture  of  bar  iron  was 
attempted  without  the  use  of  much  machinery.  The  pro- 
prietors could  not  compete  with  imported  products  of 
British  ironmasters  who  carried  on  their  operations  on  a 
large  scale,  using  coal  and  improved  machinery.^ 

One  of  the  furnaces  was  again  put  in  blast  by  a  Mr. 
Bentley  but  remained  in  operation  only  forty  days.  Mr. 
Bentley's  plan  to  produce  castings  at  a  cost  of  $37.50  and 
to  sell  them  for  $60  per  ton  could  not  be  put  into  practice.^ 

In  1867  the  property  passed  into  the  hands  of  a  Pittsburg 
Company,  and  for  some  years  ore  was  shipped  to  Pitts- 
burg.^ Iron-making  at  Marmora  was  ended  by  reason  of 
the  high  cost  of  transportation,  inefficiency  of  production, 
and  competition  and  low  prices  in  the  market. 

Meanwhile,  a  furnace  to  smelt  bog  ore  was  erected  in 
Essex  County.  Sufficient  quantities  of  ore  were  found 
within  a  distance  of  five  miles.  The  ore  was  melted  with  a 
mixture  of  hardwood  and  charcoal.  Stoves,  ploughs,  and 
potash  kettles  for  the  settlers  were  made  at  a  foundry  near 
the  furnace.  The  plant  was  operated  until  1838,  when  it 
was  abandoned  through  lack  of  funds  and  ores.'* 

In  1837  a  blast  furnace  was  built  at  Marmora  to  use  the 
iron  ore  of  Madoc  Township,  Hastings  County.  The  iron 
produced  was  made  into  implements,  ploughs,  potash  ket- 
tles, and  similar  settlers'  stores.  A  drop  in  the  price  of  iron, 
together  with  a  lawsuit,  caused  its  abandonment  in  1844.^ 

We  again  hear  of  Mr.  Van  Norman  in  connection  with 

the  iron-works  built  at  Houghton,  Norfolk  County.  After 

his  failure  at  Marmora  he  returned  to  Normandale.  About 

^  Ontario,  Report  of  Royal  Commission  on  Mines,  1890,  p.  322. 

2  Canada,  Geological  Survey,  1863,  p.  109. 

'  Bartlett,  op.  cit.,  p.  53. 

^  Canadian  Mining  Manual,  1897,  pt.  11,  p.  64. 

*  Ontario,  Report  of  Royal  Commission  on  Mines,  p,  389. 


54    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

this  time  the  Great  Western  Railway  was  under  construc- 
tion. Messrs.  Fisher  &  McMaster,  of  Hamilton,  who  were 
furnishing  car  wheels  to  the  railway  company,  were  having 
a  great  deal  of  trouble  in  getting  suitable  charcoal  iron.  As 
the  iron  formerly  made  at  Normandale  was  just  the  kind 
needed,  they  offered  Mr.  Van  Norman  $45  per  ton  for  all 
the  iron  he  could  make,  provided  the  iron  was  suitable  for 
the  manufacture  of  car  wheels.  As  soon  as  sufficient  bog 
ores  were  located  in  Norfolk  County,  a  blast  furnace  was 
built,  and  it  was  put  into  operation  in  1854,  In  the  follow- 
ing spring  400  tons  of  iron  were  shipped,  but  the  iron,  on 
being  tested,  was  rejected  because  it  would  not  chill.  It 
had  to  be  sold  elsewhere  for  only  $22  per  ton,  which  was 
below  the  cost  of  production.  The  works,  which  had  cost 
about  $30,000,  were  abandoned,  and  Mr.  Van  Norman's 
career  in  the  iron  business  was  ended.  ^ 

This  was  the  last  blast  furnace  in  operation  in  Ontario 
previous  to  1895.  In  the  mean  time,  however,  several  pro- 
posals were  advanced.  In  1873  a  company  was  formed  to 
purchase  the  Haycock  Iron  Mines  and  to  erect  a  blast  fur- 
nace and  Bessemer  converters  for  making  steel.^  In  1875 
attempts  were  made  to  smelt  iron  ore  with  crude  petroleum 
in  one  of  the  Marmora  furnaces,  but  they  were  not  econo- 
mically successful.^  Between  1876  and  1879  the  Peterboro, 
Cobourg,  and  Marmora  Railroad  and  Mining  Company 
applied  to  the  Ontario  Assembly  for  power  to  acquire  land, 
erect  furnaces,  and  manufacture  iron,  but  the  ore  was  all 
exported  to  the  United  States  until  1877,  when,  because  of  a 
falling  off  in  the  demand,  it  was  piled  at  the  mouth  of  the 
mine.*  Between  1878  and  1879  a  large  English  firm  was 
making  arrangements  in  Toronto  to  secure  a  lease  of  land 
on  which  to  manufacture  iron.^    In  1879  a  company  was 

^  Bartlett,  op.  cit.,  p.  531. 

2  Journal  of  the  Iron  and  Steel  Institute,  1873,  no.  XI,  p.  457. 

3  IMd.,  p.  595. 

4  Ibid.,  1876,  p.  186. 

^  Monetary  Times,  vol.  xii,  p.  720. 


THE  HISTORY  OF  THE  INDUSTRY  55 

formed  to  construct  and  maintain  blast  furnaces  for  the 
smelting  of  iron  ore  and  manufacture  of  iron  at  Port  Hope 
and  elsewhere  in  Ontario.^  As  no  proposal  apparently  led 
to  any  permanent  results,  Ontario  had  no  iron  plant  in 
operation  in  1879. 

§  4,  Coal  and  iron  ore  were  discovered  in  the  Maritime 
Provinces  as  early  as  1604,  but  it  was  not  until  the  third 
decade  of  the  nineteenth  century  that  a  small  quantity  of 
bar  iron  was  made  in  a  Catalan  forge  from  the  ores  at  Nic- 
taux.2  In  the  year  1825  an  association,  called  the  Annapo- 
lis Mining  Company,  was  formed  with  a  capital  of  £100,000 
to  manufacture  iron  at  Clementsport,  in  Annapolis  County. 
Besides  a  single  liability  clause  as  protection  to  sharehold- 
ers, the  Government  gave  two  bounties  of  £600  each  for  the 
manufacture  of  a  certain  quantity  of  pots,  kettles,  and  bar 
iron,  as  further  encouragement.  The  associates  purchased 
an  extensive  and  valuable  vein  of  ore  situated  about  three 
and  a  half  miles  from  the  mouth  of  the  Moose  River  and 
another  of  equal  importance  in  the  upper  part  of  Annapolis 
county.  A  large  smelting  furnace,  coal  houses,  and  stores 
were  built  for  £30,000.  The  extensive  forest  at  the  head  of 
the  river  supplied  an  abundance  of  charcoal,  which  alone 
was  used  for  fuel.  Smelting  and  casting  went  on  favorably, 
as  the  iron  produced  proved  excellent  both  for  foundry 
work  and  for  refined  bar  iron.  But  since  the  product  had 
to  compete  with  English  wares,  much  depended  on  the 
economy  and  skill  with  which  the  establishment  was  man- 
aged.^ Unfortunately,  the  company  employed  inexperi- 
enced and  unskilled  men,  not  practically  acquainted  with 
the  manufacture  of  iron.  With  a  powerful  blast,  a  large 
furnace,  and  the  best  charcoal,  not  more  than  13  tons  of 
cast  iron  a  week  could  be  produced.*  Moreover,  as  the  ore 

*  Monetary  Times,  vol.  xn,  p.  720. 

2  Nova  Scotia,  Mines  Report,  1877,  p.  43.  '  Ibid.,  p.  43. 

*  Abraham  Gesner,  Industrial  Resourees  of  Nova  Scotia,  p.  257. 


56    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

was  of  poor  grade,  it  produced  a  poor  quality  of  iron  unless 
it  was  mixed  with  other  ores.  Limestone  had  to  be  secured 
from  St.  John,  New  Brunswick.^  After  the  works  had  been 
in  operation  a  short  time,  they  were  suddenly  closed,  partly 
for  political  causes.- 

They  remained  closed  for  thirty  years,  until  in  1861 
operations  were  resumed  for  a  short  time.  Little  is  known 
of  the  work  for  the  next  decade,  except  that  in  1872  about 
one  hundred  tons  were  produced  and  shipped  to  Boston. 
In  1873  the  plant  was  operated  for  six  weeks,  and  in  1874  it 
passed  into  the  hands  of  the  New  York-Nova  Scotia  Iron 
and  Coal  Mining  Company.  Apparently  no  iron  has  been 
produced  in  the  section  since  that  time.^ 

The  next  early  attempt  at  iron-making  in  the  Maritime 
Provinces  was  made  in  1827,  when  the  General  Mining  As- 
sociation opened  coal  mines  at  Stellarton,  Pictou  County. 
One  thousand  pounds  was  laid  aside  for  an  experiment  in 
iron-making.  A  foundry  and  a  furnace  were  built  in  1829, 
and  the  smelting  of  several  ores,  mostly  red  hematites,  was 
attempted.^  The  furnace-man  in  charge  was  an  Irishman 
experienced  in  the  trade,  brought  over  from  Great  Britain, 
but  he  had  great  difficulty  in  getting  the  metal  to  flow. 
Although  eight  tons  of  iron  were  made  daily,  an  excess  of 
phosphorus  and  lack  of  silicon  made  it  hard  and  useless  for 
foundry  purposes.  After  fifty  tons  had  been  made,  the  men 
got  drunk  one  night  and  left  the  furnace  to  take  care  of  it- 
self, which  it  did  for  all  time  to  come.  In  the  morning  the 
furnace  was  cold  and  the  metal  a  solid  mass.^ 

New  Brunswick,  too,  was  the  scene  of  early  endeavors  in 
the  iron  industry.  In  1836  an  iron  ore-bed  was  discovered 
at  Woodstock,  Carleton  County.    About  1848  the  York 

*  Harrington,  op.  cit.,  p.  255. 

2  Nova  Scotia,  Mines  Report,  1877,  p.  43. 
^  Woodman,  op.  cit.,  p.  40. 

*  H.  S.  Poole,  "Iron  Making  in  Nova  Scotia,"  Canadian  Mining  Re- 
view, vol.  xii,  p.  204. 

^  Canadian  Engineer,  vol.  ii,  p.  104. 


THE  HISTORY  OF  THE  INDUSTRY  57 

and  Carleton  Mining  Company  obtained  from  the  Provin- 
cial Government  a  subsidy  of  10,000  acres  of  picked  land 
and  expended  $30,000  on  a  blast  furnace.  Within  a  year 
or  two  the  works  were  injured  by  fire.  Repairs  were  made, 
however,  and  the  plant  again  put  in  operation  until  an  ex- 
plosion wrecked  the  furnace  and  buildings  and  ruined  the 
company.  The  works  were  rebuilt  by  an  English  firm  and 
remained  in  operation  for  eighteen  months  during  which 
time  1000  tons  of  iron  were  made  and  shipped  to  England. 
In  1862  the  property  passed  into  the  hands  of  the  Wood- 
stock Charcoal  Iron  Company.  White  pig  iron  was  made 
and  exported  to  England  for  use  at  Sheffield  in  the  manu- 
facture of  armor  plates.  The  iron  is  said  to  have  been  of 
superior  quality,  but  the  cost  of  production  was  too  great. 
The  ores,  besides  being  difiicult  to  concentrate,  were  very 
lean,  and  contained  a  large  proportion  of  phosphoric  acid 
and  sulphur.  The  beds  were  irregular  and  were  soon 
worked  out.^  The  place  was  shortly  abandoned,  and  New 
Brims^ick  has  never  since  attempted  to  smelt  ores. 

In  1856  two  furnaces  were  built  at  Nictaux  Falls,  north 
of  Digby,  Nova  Scotia.  But  they  did  not  remain  in  blast 
for  any  considerable  time  because  the  phosphoric  content 
of  the  ores  reduced  the  quality  of  the  iron.  By  1874  the 
people  of  the  neighborhood  who  wished  to  obtain  brick 
had  partly  torn  down  the  furnaces. ^ 

In  1860  a  blast  furnace  was  put  in  operation  at  Bloom- 
field,  south  of  Digby,  to  smelt  the  bog  ores  of  that  district. 
It  was  in  blast  several  times  prior  to  1880.^ 

Following  a  favorable  report  on  the  iron  deposits  in  the 
Cobequid  Mountains  in  1845,  ironworks,  consisting  of 
Catalan  forges,  one  puddling  furnace,  one  heating  furnace, 
one  furnace,  one  metal  helve,  and  one  blower,  together  with 
ore-crushing  rolls,  were  built  at  Londonderry,  Nova  Scotia, 
in  1850.  The  rolls  and  blower  were  driven  by  water  power 

^  Bartlett,  op.  cit.,  pp.  535-36.  ^  Harrington,  op.  cit.,  p.  526. 

«  Bartlett,  op.  cit,  p.  539. 


58    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

until  1858.  A  small  quantity  of  bar  iron  was  made,  but 
only  until  1853,  when  a  charcoal  iron  furnace  was  put  in 
blast.  The  ores  used  were  nearly  all  a  pure  peroxide  of 
iron  found  in  the  neighborhood.  Large  tracts  of  forest  sup- 
plied almost  any  quantity  of  hardwood  for  making  char- 
coal. The  iron  produced  proved  to  have  ductility,  high 
powers  of  resistance  to  strain,  and  adaptation  to  all  those 
processes  by  which  the  finest  kinds  of  iron  and  steel  are 
made. 

Londonderry  is  situated  on  the  west  branch  of  the  Great 
Village  River,  immediately  on  the  ore  deposits.  The  near- 
est shipping  point  was  six  miles  distant  at  Great  Village, 
with  which  there  was  no  means  of  communication  except 
by  wagon.  The  home  market  was  too  small  for  the  whole 
output,  and  iron  for  export  had  to  be  carried  to  Cobequid 
Bay,  on  which  navigation  is  dangerous  owing  to  the  rapid- 
ity of  the  tides.  As  the  importance  of  obtaining  railway 
communication  was  very  great,  the  owners  exerted  them- 
selves to  get  the  Intercolonial  Railway  as  close  to  the  plant 
as  possible.  This  railway,  although  not  built  direct  to  the 
blast  furnace,  was  a  distinct  advantage  to  the  company, 
not  only  through  purchases  of  its  output,  but  also  by  aid- 
ing it  to  ship  the  product  to  more  distant  markets.  It  also 
brought  the  iron  ores  of  Nova  Scotia  into  closer  connection 
with  the  coal-fields  of  Cumberland  and  Pictou  Counties. 
So  long  as  charcoal  was  the  only  fuel  available,  the  scale  of 
operations  had  been  confined  to  dimensions  quite  out  of 
proportion  to  the  supplies  of  ore. 

In  1873  the  Steel  Company  of  Canada  was  formed  to 
purchase  these  Londonderry  and  Acadia  mines  and  iron- 
works. The  manufacture  of  steel  by  the  Siemens  open- 
hearth  process,!  steel  rails,  cast  steel,  and  spring  steel,  was 
proposed.  The  company  expended  $2,500,000  in  prospect- 
ing for  and  raising  ore,  in  building  modern  rotatory  fur- 
naces, a  melting  furnace  with  regenerative  gas  furnaces, 
1  Journal  of  the  Iron  and  Steel  Institute,  1873,  no.  i,  p.  204. 


THE  HISTORY  OF  THE  INDUSTRY  59 

and  in  building  houses  for  workmen.  It  also  acquired  the 
right  to  use  the  Siemens  open-hearth  process  in  Canada, 
built  ten  miles  of  railway  from  the  mines  to  the  plant,  and 
made  an  agreement  with  the  Intercolonial  Railway  for  the 
right  to  use  its  lines.  ^ 

In  1874  Dr.  Siemens,  who  was  chairman  of  the  company, 
made  his  first  commercial  experiment  in  the  direct  con- 
version of  iron  into  steel,  but  failed  unfortunately.^  When, 
in  1876  and  1877,  coke  ovens  were  built,  to  use  coal  from 
the  Albion  Mines,  and  the  first  coke  blast  furnace  erected, 
the  old  furnaces  and  the  steel  plant  were  razed  and  a  new 
rolling  mill  put  up  on  their  site.^  Thus,  the  plant  at  Lon- 
donderry was  in  1879  the  most  pretentious  endeavor  that 
had  ever  been  made  in  the  iron  and  steel  industry  of  Nova 
Scotia. 

A  few  years  earlier  the  Pictou  Coal  and  Iron  Company 
had  been  formed  to  mine  coal  and  iron  ore,  to  manufacture 
iron,  and  to  construct  a  railway  from  the  mines  to  some 
point  on  the  Intercolonial  Railway.  Extensive  explorations 
were  carried  on  and  valuable  discoveries  of  Bessemer  ore 
were  made.  But  the  company  could  not  raise  sufficient 
capital;  progress  was  checked,  and  the  once  bright  prospect 
faded  away."* 

§  5.  Besides  the  early  attempt  to  establish  the  manufac- 
ture of  the  primary  products,  pig  iron  and  steel,  in  Canada, 
the  manufacture  of  finished  goods  had  already  been  intro- 
duced. Incidentally,  it  has  been  noted  that  many  of  these 
plants  carried  the  manufacture  on  to  the  finished  stage. 
The  plant  at  Lyndhurst  produced  bar  iron  as  early  as 
1800;  those  at  St.  Maurice  and  Normandale  produced 
kettles  and  other  casts  demanded  by  the  early  settlers. 

^  Journal  of  the  Iron  and  Steel  Institute,  1875,  no.  ii,  p.  596. 

^  Woodman,  op.  cit.,  p.  153. 

'  Canada,  Report  on  Mining  and  Metallurgical  Industries,  1908,  p.  539. 

*  Canadian  Engineer,  vol.  ii,  p.  104. 


60    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

The  plant  at  Londonderry  adopted  the  same  policy.  It  is 
important  to  note  that  it  was  those  plants  which  carried  the 
process  through  to  the  finishing  stage  that  had  the  great- 
est success  and  permanence. 

But  in  the  last  two  decades  of  the  period  with  which  we 
are  dealing,  the  tendency  to  build  separate  plants  turning 
out  finished  products  alone  became  widespread.  The  man- 
ufacture of  many  of  the  more  highly  finished  products  of 
iron  and  steel,  such  as  boilers,  engines,  springs,  axles,  edge 
tools,  foundry  work,  tacks,  rivets,  bolts,  and  nuts  was 
gradually  developing  with  the  progress  of  the  country, 
and  assuming  some  importance.  Our  attention  may,  there- 
fore, be  turned  for  a  moment  to  the  rolling-mill  industry. 

Like  the  other  branches  of  the  iron  industry,  the  rolling- 
mill  industry  seems  to  have  appeared  in  Quebec  earlier 
than  in  the  other  Provinces.  Previous  to  1851  English 
wrought  nails  were  used  almost  exclusively  in  Canada.  The 
manufacture  of  cut  shingle  nails  had  been  started  in  Mon- 
treal, yet  the  larger  cut  nails  were  still  imported  into  Upper 
Canada  from  the  United  States.  But  in  1857  rolling  mills, 
known  as  the  Victoria  Ironworks,  and  later,  the  Montreal 
Rolling  Mills,  were  established  at  Montreal.  After  this 
the  imports  of  sheets,  hoops,  and  nails  diminished  and 
the  mills  turned  out  the  rest  of  the  supply.  In  1864  the 
puddling  and  rolling  mills  were  capable  of  supplying  the 
Province  with  nails  and  no  less  than  twelve  tons  of  nail 
plate  were  turned  out  daily.  Scrap  iron  was  used  at  first, 
but  as  the  supply  was  inadequate,  puddling  furnaces  were 
added  to  work  up  imported  pig  iron.  As  much  machinery 
as  possible  was  used  to  take  the  place  of  labor,  which  was 
scarce.  1  About  the  same  time  Peck,  Benny  &  Company 
built  works  in  Montreal  to  manufacture  nails,  horseshoes, 
and  spikes. 

Ontario,  too,  entered  into  this  phase  of  industrial  devel- 
opment. The  Toronto  Wire  and  Ironworks  were  founded 
^  S.  P.  Day,  English  America,  pp.  179-85. 


THE  HISTORY  OF  THE  INDUSTRY  61 

in  1854.1  In  IS55  an  establishment,  the  only  one  in  Can- 
ada, was  opened  in  Kingston  to  make  axles  and  wheels  for 
railway  carriages.^  The  present  B.  Greening  wire  plant  of 
Hamilton  had  its  inception  in  1859.^  About  1860  Messrs. 
Gzowski  and  Macpherson,  of  Toronto,  started  a  large  roll- 
ing mill  in  that  city  to  re-roll  iron  rails.  Some  bar  iron  was 
also  made  out  of  scrap.  In  1873,  however,  the  place  was 
closed  and  dismantled  because  of  the  substitution  of  steel 
for  iron  rails.  In  1864  the  Great  Western  Railway  Com- 
pany erected  a  rolhng  mill  at  Hamilton  to  patch  and  re-roll 
iron  rails.  This  continued  in  operation  until  1879,  when  the 
plant  was  leased  to  the  Ontario  Rolling  Mill  Company  for 
the  manufacture  of  bar  iron,  nail  plate,  and  fish  plate  made 
out  of  scrap  iron. 

In  1866  the  Steel,  Iron  and  Railway  Works  Company  of 
Toronto  was  organized  to  operate  a  patent  process  for 
the  manufacture  of  railway  crossing  points  and  for  putting 
steel  ends  on  railroad  rails.  Operations  were  confined  to 
the  patching  of  iron  rails  and  the  manufacture  of  some 
forgings.  The  introduction  of  steel  rails  closed  the  works 
for  a  time,  but  they  were  reopened  in  1872  after  a  merger 
with  the  Canada  Car  and  Manufacturing  Company,  which 
was  chartered  to  manufacture  and  lease  railway  cars.  The 
Ontario  Government  entered  into  an  agreement  with  the 
car  company  to  lease  the  labor  of  all  prisoners  at  the  Cen- 
tral Prison,  Toronto,  for  a  term  of  seven  and  a  half  years. 
The  Government  was  to  furnish  sufficient  workshop  space, 
with  foundations  for  machinery  and  other  permanent 
structures,  and  also  heat  and  light.  The  boilers  and  engines 
and  shaftings  required  for  motor  purposes,  the  engineers 
and  firemen,  and  the  fuel,  were  to  be  provided  by  the 
company.  The  Government  was  to  receive  56  to  60  cents 
a  day  for  the  use  of  each  prisoner.  As  the  prison,  in  course 

'  Canadian  Mining  Manual,  1895,  pp.  251-58. 

*  J.  H.  L.  Morgan,  Tariff  History  of  Canada  prior  to  1879,  p.  103. 

'  Canadian  Mining  Manual,  1895,  pp.  257-58. 


62    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

of  construction,  was  not  suitable,  it  was  altered  for  the 
purpose.  Several  railway  sidings  and  a  forge  with  four 
large  beam-hammers,  along  with  the  necessary  furnaces 
and  plant  for  the  manufacture  of  locomotives,  car  axles, 
and  large  forgings  were  installed.  Small  hammers,  a  wheel 
foundry,  equipped  to  turn  out  120  car  wheels  per  day,  a 
large  foundry  for  soft  castings,  and  shops  and  machinery 
for  making  nuts,  washers,  and  bolts,  together  with  a 
variety  of  iron-  and  wood-working  tools,  were  also  added. 
Large  stocks  of  wood,  iron,  and  coal  for  an  extensive  busi- 
ness were  laid  in. 

But  about  this  time  the  depression  of  the  seventies  set  in, 
and  orders  for  cars  were  not  to  be  had  at  any  price.  After 
building  100  to  200  cars  the  company  collapsed  and  the 
place  was  subsequently  sold  and  dismantled.  ^ 

Nor  were  the  Maritime  Provinces  backward  in  the  pro- 
duction of  finished  products.  In  1856  the  first  plant  of  the 
Portland  RolUng  Mills  was  built  in  St.  John.  Bar  iron, 
nail,  and  spike  mills  were  added  in  1860.^  In  1874  the  plant 
of  the  present  Coldbrook  Rolling  Mill  Company  of  St. 
John  was  begun.  In  1873  this  company  was  formed  with  a 
capital  stock  of  $1,000,000  and  the  plant  enlarged  to  manu- 
facture bolts,  screws,  axes,  rails,  and  railway  iron,  boiler 
plate,  rivets,  tools,  implements,  and  machinery.  The  rolling 
mill  was  built  at  Coldbrook,  three  miles  from  St.  John,  on 
the  Intercolonial  Railway,  and  a  nail  factory  in  connection 
with  it  was  situated  a  mile  or  two  away.  Old  iron  rails  and 
scrap  iron  were  the  raw  materials  used.  The  works  were 
operated  for  several  years  and  then  lay  unused  until  about 
1884.3 

We  may  now  turn  to  what  has  since  become  one  of  the 
most  important  iron  and  steel  plants  in  Canada.  In  1872, 
at  a  time  when  a  large  demand  for  railway  iron  was  created 

1  Barllett,  op.  cit.,  pp.  532-34. 

2  Canadian  Mining  Manual,  1895,  p.  252. 
*  Bartlett,  op.  cit,  p.  252. 


THE  HISTORY  OF  THE  INDUSTRY  03 

by  the  building  of  the  Intercolonial  Railway,  a  plant  was 
opened  at  New  Glasgow  by  Mr.  Graham  Fraser  for  the 
manufacture  of  marine  and  railway  forgings.  Mr.  Fraser 
manufactured  railway  spikes,  springs,  and  axles  out  of 
scrap  iron  and  did  a  general  forge  business.  After  two  steel 
hammers  had  been  installed  to  handle  an  increasing  trade, 
the  firm  was  incorporated  as  the  Nova  Scotia  Forge  Com- 
pany. In  1878,  in  order  to  secure  water  and  more  room  for 
extensions,  the  plant  was  moved  to  Trenton,  where  the 
work  was  carried  on  very  successfully.^ 

§  6.  Thus,  by  1879,  the  Canadian  iron  industry  had  not 
assumed  any  great  importance.  Ontario  could  boast  of  no 
pig-iron  producing  plant  and  no  very  important  rolling 
mills.  Quebec  was  a  Httle  better  off,  with  a  few  fairly  large 
rolling  mills  and  three  small  blast  furnaces.  But  the  Rad- 
nor forges,  renewed  at  a  later  date,  were  temporarily  closed, 
and  the  forges  and  furnaces  at  St.  Maurice  and  Yamaska 
were  on  the  eve  of  abandonment.  The  plant  of  the  Canada 
Titanic  Iron  Company,  already  closed,  was  dismantled  in 
1880.  The  only  important  plant  in  Canada  was  that  at 
Londonderry,  where  in  the  seventies  the  Steel  Company  of 
Canada  had  built  a  coke  blast  furnace  and  Siemens  open- 
hearth  furnaces,  as  well  as  extensive  finishing  mills.  Even 
this  attempt  to  establish  the  iron  industry  in  Canada  was 
almost  a  failure,  for  the  company  went  into  the  hands  of  a 
receiver  in  1883.  The  Nova  Scotia  Forge  Company  as  yet 
conducted  business  only  on  a  small  scale,  but  it  had  begun 
its  successful  career.  Other  plants  manufacturing  iron  and 
steel  products  were  numerous,  but  their  operations  could 
not  be  regarded  as  comprising  an  industry  of  any  distinc- 
tion in  the  country.  In  short,  the  national  policy  of  pro- 
tection introduced  in  1879  had  an  almost  open  field  in  its 
effort  to  stimulate  a  Canadian  iron  and  steel  industry. 
*  Industrial  Canada,  vol.  vi,  pp.  327-29. 


CHAPTER  IV 

ELEMENTS   OF   SUCCESS   AND   FAILURE 

§  1.  Naturally  one  asks  for  the  reason  of  this  back- 
wardness in  the  Canadian  iron  and  steel  industry.  The 
previous  chapter  has  described  in  more  or  less  detail  the 
results  of  all  known  attempts,  down  to  1879,  to  produce 
iron  in  Canada;  for  it  is  through  analysis  of  the  small  suc- 
cesses and  failures  that  the  fundamental  conditions  of  an 
industry  are  revealed. 

These  conditions  of  success  and  failure  may  be  conven- 
iently divided  into  two  general  groups.  The  first  group 
includes  the  technical  and  more  fundamental  conditions, 
such  as  the  supply  and  character  of  ores,  fuel,  and  labor, 
the  presence  or  absence  of  technical  experience,  managerial 
ability,  capital,  and  the  extent  and  nature  of  the  market. 
Since  each  of  these  conditions  is  fundamental,  they  will  be 
discussed  at  greater  length  in  later  sections  of  this  chapter. 

Another  group  of  conditions,  or  factors,  might  be  in- 
cluded under  the  term  "commercial  poUcy."  They  have  to 
do  with  the  tarifif  system  or  any  other  device  for  the  artifi- 
cial nourishment  of  an  industry.  As  the  success  of  the 
commercial  policy  depends  on  those  conditions  which  have 
been  classified  as  technical,  the  consideration  of  the  tech- 
nical conditions  of  the  Canadian  iron  and  steel  industry 
should  receive  chief  attention.  It  is  important,  however, 
to  outhne  the  actual  tariff  policy  in  force  throughout  this 
early  period  of  industrial  history,  before  referring  to  tech- 
nical considerations. 

§  2.  The  history  of  Canadian  commercial  policy  may  be 
conveniently  divided  into  three  periods.  The  first,  ending 


ELEMENTS  OF  SUCCESS  AND  FAILURE        65 

in  1846,  covers  the  period  of  French,  and  later  British,  con- 
trol of  the  colonies.  So  long  as  France  and  Britain  gave  the 
colonial  products  preferential  treatment,  they  had  the  priv- 
ilege of  fixing  the  tariff  on  goods  entering  the  colonies  from 
foreign  nations.  In  1842  these  "Imperial  Duties"  were  as 
high  as  72  per  cent  on  pig  iron,  15  per  cent  on  castings, 
nails,  etc.,  and  20  to  30  per  cent  on  wire.  Additional  cus- 
toms duties  were  imposed  by  the  colonies  on  imports  from 
foreign  nations.  It  is  scarcely  necessary  to  say  that  the 
British  manufacturers  supplied  the  greater  part  of  the 
Canadian  demand.  Very  little  iron  was  produced  in  Canada 
before  1846,  and  at  the  same  time  imports  from  the  United 
States  were  negligible,  i 

When  England  repealed  the  Com  Laws  in  1846,  she 
threw  open  the  home  market  for  grain  to  foreign  as  well  as 
colonial  producers.  The  consequence  of  England's  action 
was  a  severe  depression  in  the  colony  in  1847.  Canada 
immediately  claimed  the  right  of  determining  the  rates  of 
duty  on  imported  goods,  and  in  1847  Great  Britain  saw  fit 
to  grant  this  privilege.  The  so-called  "Imperial  Duties" 
were  immediately  repealed  by  the  Canadas,  and  by  the 
Maritime  Provinces,  and  new  customs  tariff  acts  were 
passed.^  As  all  iron  and  steel  goods,  even  those  from  Great 
Britain,were  included  by  the  Canadas  in  a  1  per  cent  list, 
Glasgow  iron  founders  immediately  objected,  claiming  that 
their  growing  iron  trade  with  Canada  would  be  ruined. 
The  British  Government,  upholding  the  value  of  recipro- 
cal exchange  of  products,  claimed  that  such  a  policy  would 
be  injurious  to  the  trade  of  both  Great  Britain  and  Can- 
ada.^ The  colony,  however,  persisted  in  her  supposedly 
evil  ways  until  the  principle  of  Canadian  autonomy,  at 
least  on  this  point,  was  firmly  lodged  in  the  British  public 
mind.  In  1849  Canada  advanced  the  rate  on  the  list  of 
raw  materials,  including  pig  iron  and  iron  ore,  from  1  to  22" 

^  United  States,  Commercial  Relations  of  the  United  States,  1842,  p.  163. 
2  10-11  Vic,  1847,  chap.  31.  ^  Morgan,  op.  cit.,  p.  75. 


66    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

per  cent.i  In  1853  scrap  iron,  bar  iron,  pig  and  sheet  iron 
were  kept  on  this  Hst,  notwithstanding  the  general  reduc- 
tion of  duties. 2  By  the  Reciprocity  Treaty  of  1854,  with 
the  United  States,  ores  of  all  metals,  including  iron,  were 
admitted  from  and  exported  to  the  United  States  free  of 
duty.*  In  1858  the  duties  were  raised  again;  on  bar  iron, 
wrought  and  cast  steel,  plates  and  hoops,  to  5  per  cent;  on 
rolhng-mill  products  and  iron,  n.e.s.  (not  elsewhere  speci- 
fied), to  20  per  cent.  Pig  iron,  scrap  iron,  coal,  and  coke 
were  put  on  the  free  list.'*  By  a  new  revision  in  1859  the 
5  per  cent  list  was  advanced  to  10  per  cent,  other  iron  du- 
ties remaining  the  same.^ 

In  the  Maritime  Provinces  the  duties  on  iron  and  steel 
were  considerably  advanced  in  a  similar  manner,  so  that 
when  Confederation  was  proposed  in  1867,  the  duties  im- 
posed by  the  various  Provinces  were  as  follows :  — 


Article 

Canada 

Nova  Scotia 

New  Brunswick 

Prince  Edward  I'd. 

Iron  and  hardware 

20% 

12|% 

15% 

7i% 

Iron  bars  and  rods 

10 

5 

15 

n 

Iron  plates 

10 

5 

15 

n 

Thus,  on  a  large  volume  of  goods,  Canada  was  imposing 
higher  duties  than  were  the  Maritime  Provinces.  Pending 
the  settlement  of  the  negotiations  for  Confederation,  the 
duties  were  abolished  in  1867. 

With  the  organization  of  Confederation  accomplished 
the  new  Government  set  about  the  preparation  of  a  new 
tariff.  In  1868  iron  bars,  rods,  sheets,  plates,  nails,  spike 
rod,  wrought  steel,  iron  and  steel  slabs,  blooms,  billets,  and 
ingots  were  placed  on  a  5  per  cent  list.  Pig  iron,  scrap  iron 
and  steel,  iron  ore,  cast  steel,  rolling-mill  products,  coal  and 
coke,  were  admitted  free  of  duty.  The  "Not  elsewhere 
specified"  list  was  charged  15  per  cent.^  In  1870  blooms 
and  billets  were  put  on  the  free  list,  but  a  duty  of  50  cents 

1  Globe,  1849,  April  18.  2  Morgan,  op.  dt.,  p.  28. 

3  Ibid.,  p.  3.  *  22  Vic,  1858,  chap.  76. 

^  Ibid..  1859,  chap.  2.  ^  31  Vic,  1868,  chap.  44. 


ELEMENTS  OF  SUCCESS  AND  FAILURE        67 

per  ton  was  imposed  on  coal  and  coke;  ^  this  was  repealed, 
however,  in  1871.-  No  further  revision  affecting  iron  and 
steel  duties  seems  to  have  been  made  prior  to  1879. 

The  duties  on  iron  and  steel  products  were  very  low;  the 
tariff,  as  a  matter  of  fact,  was  a  revenue  tariff  providing 
only  incidental  protection.  The  year  1859  had  seen  the 
nearest  approach  to  protection  in  the  form  of  duties  of  10 
per  cent  on  a  number  of  products,  especially  bar  iron  and 
cast  and  wrought  iron,  and  of  20  per  cent  on  rolling-mill 
products.  Pig  iron,  scrap  iron,  iron  ore,  and  coal  were  ad- 
mitted free  practically  throughout  the  period  in  question. 
Some  have  claimed  that  the  beginning  of  the  protective 
policy  may  be  found  in  the  tariff  of  1859,  and  certainly 
in  Ontario  and  Quebec  a  definite  opinion  existed  in  favor 
of  such  a  policy.^  For  instance,  a  circular  was  sent  out 
about  1871  asking  for  an  increase  of  duties  on  the  5  per 
cent  list  to  7|  per  cent,  and  for  a  duty  of  15  per  cent  on 
pig  iron.*  The  duties,  however,  were  never  high  after  the 
reduction  in  1867,  and  the  tariffs  could  not  be  regarded  as 
protective  measures. 

It  is  not  difficult  to  determine  the  relation  between  such 
a  tariff  and  an  industry  which  barely  maintained  an  exist- 
ence throughout  this  early  period.  The  production  of  pig 
iron  had  to  be  conducted  on  its  own  merits  at  practically 
all  times.  Only  one  plant,  which  produced  iron  of  an  ex- 
traordinarily good  quaHty  used  for  special  purposes,  was 
regularly  in  operation.  Otherwise,  the  continuity  of  the 
industry  was  maintained  only  by  new  enterprises  taking 
the  place  of  the  previous  failures.  In  spite  of  the  fact  that 
some  assistance  was  given  to  other  lines  of  production, 
purposely  or  not,  the  greatest  developments,  even  in  the 
finishing  industry,  came  between  1868  and  1879.  These 
were  owing  largely,  as  we  shall  see,  to  the  increased  demand 

1  33  Vic,  1870,  chap.  9.  2  Ibid.,  1870,  chap.  10. 

2  E.  Porritt,  Sixty  Years  of  Protection  in  Canada. 
*  Iron  Age,  vol.  xiii,  February  7,  p.  7. 


68    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

for  railway  supplies,  rather  than  to  the  duties  which  had 
already  been  reduced  by  the  Act  of  18G7,  and  were  only 
partially  reimposed  by  the  Act  of  1868. 

It  would  be  more  difficult  to  estimate  what  might  have 
happened  had  the  duties  been  higher.  The  fact  that  they 
were  not  higher  may  have  handicapped  several  projects. 
The  production  of  iron  at  Annapohs  in  1825,  at  Marmora 
in  the  forties,  and  at  Moisic  in  the  seventies,  was  evidently 
checked  by  importations  of  British  iron  goods.  Yet  other 
conditions,  such  as  the  high  cost  of  production  and  some- 
times the  low  price  of  iron,  were  the  real  factors  checking 
the  growth  of  the  iron  industry  of  Canada. 

§  3.  To  these  other  factors  we  may  now  turn  our  atten- 
tion. Probably  the  one  of  greatest  importance  in  the  de- 
velopment of  the  industry  is  the  supply  of  iron  ores.  As  we 
have  seen,  a  noticeable  feature  of  Canadian  ores  is  their 
great  number  and  variety.  It  took  a  long  time  to  discover 
them,  however;  and  it  is  important  to  note  that  only  a  few 
of  the  deposits  worked  at  present,  those  at  Londonderry, 
Nictaux,  and  Radnor,  were  known  before  1879.  Lack  of 
government  exploration  and  of  private  initiative  and  per- 
severance, together  with  the  general  lateness  of  Canadian 
development,  account  for  the  failure  to  discover  ores. 

Of  the  ore  deposits  that  were  known,  few  were  satis- 
factory. The  best  were  not  found  in  sections  of  the  country 
within  a  reasonable  distance  of  the  markets  at  that  time. 
Those  in  eastern  Ontario  were  heavy  in  sulphur  and  had 
to  be  most  carefully  worked  to  produce  a  good  grade  of 
iron.  Those  used  at  Houghton  contained  too  much  phos- 
phorus to  produce  the  quality  of  chilled  iron  demanded  at 
that  time.  Some  ores  in  Quebec,  as  at  Bale  St.  Paul,  con- 
tained too  much  sulphur,  and  the  titanium,  which  was  of  no 
special  value  to  the  iron,  necessitated  the  use  of  an  exces- 
sive amount  of  charcoal  in  smelting.  As  the  ore  at  Wood- 
stock was  very  lean  and  contained  too  much  phosphorus, 


ELEIVIENTS  OF  SUCCESS  AND  FAILURE        09 

the  cost  of  production  of  iron  was  too  great,  notwithstand- 
ing the  excellent  quality  of  iron  made  and  the  special  pur- 
pose for  which  it  was  used.  So,  too,  the  phosphorus  in  the 
ore  used  at  Stellarton,  Nova  Scotia,  in  1828,  made  the  iron 
too  hard  for  foundry  purposes.  Moreover,  while  in  every 
country  where  the  manufacture  of  iron  was  entered  into, 
a  judicious  mixture  of  ores  was  used  to  bring  about  a  pro- 
duct suitable  for  consumption,  these  local  Canadian  indus- 
tries were  unable  to  secure  ores  of  different  kinds. 

Even  where  the  mines  were  satisfactory,  the  cost  of  min- 
ing usually  amounted  to  $1  per  ton  in  the  most  favorable 
circumstances.  Inexperience  of  the  miners  and  poor  man- 
agement did  not  improve  conditions.  The  mines  in  On- 
tario, which  were  usually  open  cut,  could  not  be  worked  in 
winter;  those  of  Nova  Scotia  were  too  deep.  Nevertheless, 
the  quahty  of  certain  ores  permitted  the  production  of  a 
specially  good  quality  of  iron.  The  product  of  the  London- 
derry plant  made  excellent  cast  iron;  that  produced  at  St. 
Maurice  and  Radnor  was  not  surpassed  even  by  Swedish 
charcoal  iron. 

But  even  the  finest  of  these  ores  were  insufficient  to  sup- 
ply a  permanent  industry,  especially  since  the  deposits 
were  usually  irregular  and  small.  The  most  successful  of 
early  enterprises,  those  at  Normandale  and  St.  Maurice, 
had  finally  to  be  given  up  because  the  beds  within  reach 
were  exhausted.  Even  where  other  factors  were  the  imme- 
diate cause  of  abandonment  of  iron-making  estabhshments, 
the  scarcity  of  ore  must  shortly  have  placed  a  check  on 
operations. 

Allied  to  this  question  of  exliaustion  of  ore  deposits  is 
that  of  the  proximity  of  the  ore  to  the  plant.  The  lower  the 
grade  of  ore,  the  greater  the  cost  of  transportation  of  the 
ore  per  ton  of  pig  iron  produced.  Likewise  the  distance 
from  the  plant  of  a  comparatively  rich  ore  might  easily 
place  it  outside  the  range  of  commercial  value.  In  cases, 
as  at  Lyndhurst,  the  plant  was   built   too  far  from  the 


70    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

deposits  in  the  first  place.  More  often,  as  the  deposits 
were  exhausted,  the  ore  had  to  be  brought  from  greater 
and  greater  distances  until  finally  its  use  became  quite  im- 
practicable, and  operations  had  to  be  abandoned. 

§  4.  Fluxing  materials  are  exceptionally  abundant  in 
Canada;  so  absence  of  these  did  not  hinder  the  early  estab- 
lishment of  an  iron  and  steel  industry.  The  supply  of  fuel 
was  less  satisfactory.  As  a  matter  of  fact,  therein  lies  the 
greatest  difficulty  with  which  the  industry,  especially  in 
certain  localities,  has  had  to  contend.  Before  the  introduc- 
tion of  the  use  of  bituminous  coal,  the  lack  of  beds  of  an- 
thracite coal  in  eastern  Canada  limited  the  iron  industry 
to  the  manufacture  of  charcoal  iron.  Yet  while  Canada  is 
well  supplied  with  excellent  hardwoods  for  making  char- 
coal, these  were  not  always  found  within  reasonable  dis- 
tance of  the  furnaces.  In  certain  sections  the  charcoal 
could  be  obtained  cheaply  from  the  settlers,  who  made  it 
during  the  otherwise  idle  winter  months,  but  in  other  cases 
it  was  necessary  to  secure  a  government  grant  of  wood- 
land to  insure  a  steady  supply.  Before  the  end  of  the 
period  in  question  the  demand  for  charcoal  iron  was  re- 
stricted to  certain  uses  and  did  not  apply  to  general  con- 
sumption. At  such  a  period  the  use  of  charcoal  was  often 
an  absolute  detriment  to  the  industry.  The  use  of  bitumi- 
nous coke-producing  coal  gradually  altered  the  situation 
in  Nova  Scotia,  but  only  near  the  end  of  the  period  in  ques- 
tion. 

Ontario  is,  unfortunately,  absolutely  devoid  of  coal,  and 
her  distance  from  coal-fields  has  always  placed  her  at  a  dis- 
advantage for  the  production  of  coke  iron.  In  the  early 
period  the  transportation  of  coal  or  coke  to  the  ores  was 
usually  quite  impracticable  unless  the  duty  was  removed, 
and  unless  the  plant  was  large  enough  to  demand  a  consid- 
erable supply.  The  freight  rates  on  coal  carried  from 
Nova  Scotia  to  Ontario  were  very  high,  especially  in  winter 


ELEMENTS  OF  SUCCESS  AND  FAILURE        71 

when  the  St.  Lawrence  River  was  closed  to  na\'igation. 
Consequently  it  was  almost  impossible  for  Ontario  to  com- 
pete with  Nova  Scotia  in  the  production  of  iron,  and  espe- 
cially with  the  United  States  and  England,  where  the  ores 
were  in  close  proximity  to  a  permanent  source  of  good 
fuel. 

§  5.  The  lack  of  transport  service  was  another  difficulty. 
Mention  of  transportation  has  been  made,  already,  in  the 
discussion  of  carrying  ore  to  the  furnaces,  which,  of  course, 
usually  means  the  carrying  of  ore  to  the  coal  deposits.  In 
this  early  period,  the  blast  furnace  was  commonly  built 
near  the  ore  deposits,  the  fuel  was  secured  from  neighboring 
forests  or  coal  mines,  or  brought  from  a  distance,  and  the 
products  shipped  some  distance  to  market.  In  the  latter 
contingency,  railways  or  canals  or  other  facilities  for  trans- 
portation were  of  very  great  importance.  In  early  years 
the  lack  of  carrying  agencies  gave  rise  to  difficulty  at  ]\Iar- 
mora  and  Radnor.  In  certain  cases  they  were  adequate. 
The  plant  at  Normandale  was  close  enough  to  Lake  Erie 
to  permit  the  owner  to  ship  his  wares  to  Canadian  Lake 
ports,  to  Buffalo,  and  even  to  Chicago.  The  Intercolonial 
Railway  gave  the  plant  at  Londonderry  a  new  market  and 
a  new  outlet,  and,  at  the  same  time,  a  more  direct  and 
a  cheaper  supply  of  coal  from  the  Springhill  and  Pictou 
collieries. 

In  some  respects  the  iron  industry  was  adversely  affected 
by  the  increase  of  transportation  facihties.  The  develop- 
ment of  the  canal  system  of  the  St.  Lawrence  did  not  im- 
prove the  situation,  for  British  iron  was  let  in  at  such  prices 
that  it  was  impossible  for  the  Canadian  producer  to  com- 
pete in  the  Ontario  market.  Later,  when  iron  rails  were 
rapidly  supplanted  by  hea\aer  steel  rails,  plants  that  used 
iron  rails  as  raw  material  had  either  to  close  down  or  to  use 
pig  iron  or  other  scrap  iron.  Thus,  the  influence  of  trans- 
portation facilities  in  permitting  the  product  to  reach  a 


72    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

market,  in  supplying  raw  material,  and  even  the  protection 
which  the  lack  of  transportation  facilities  gave  to  the  local 
home  markets  when  other  factors  were  favorable,  can  hardly 
be  overestimated  in  respect  to  this  early  period. 

§  6.  The  labor  supply  seems  to  have  given  occasion  for 
additional  difficulty.  It  is  said  that  at  Normandale  the  men 
were  arrogant  and  unruly,  went  on  a  strike  on  the  least 
provocation,  and,  as  labor  was  scarce,  easily  had  their  own 
way.  At  St.  Maurice,  wages  were  relatively  low  because 
much  of  the  work  could  be  done  during  the  winter  by  the 
habitants,  but  in  most  cases  day  wages  were  50  cents  higher 
than  in  other  countries,  i  At  Londonderry  ordinary  labor- 
ers received  $1  to  $1.30,  miners  $1.50,  and  furnace-men 
$1.50  to  $1.80  per  day.  The  lack  of  skilled  and  experi- 
enced labor  and  the  absence  of  managerial  ability,  which 
is  of  first  importance  in  the  iron  and  steel  manufacture, 
were  primary  factors  in  retarding  its  growth.  As  the  in- 
dustry was  new  to  the  country,  the  workmen  had  to  be 
brought  from  abroad  until  Canadians  could  be  trained.  To 
induce  men  to  leave  remunerative  employment  in  old  es- 
tablished smelting  centers,  it  was  necessary  to  offer  them 
wages  higher  than  their  previous  maximum.^  This  was  the 
case  at  the  first  furnace  built  in  Nova  Scotia  in  1825.  In 
Quebec,  at  St.  Maurice,  the  French  soldiers  had  to  be  called 
into  service,  and  workmen  had  to  be  brought  from  France. 
So,  too,  in  Ontario,  at  Lyndhurst  and  Marmora,  inexperi- 
ence and  inefl3,ciency  left  the  plants  far  behind  the  times. 
Owing  to  a  lack  of  metallurgical  knowledge,  the  Moisic 
Iron  Company,  with  ores  assaying  70  per  cent,  used  a 
process  far  too  expensive.  Later,  at  Quebec,  the  Siemens 
open-hearth  furnaces  were  operated  by  a  man  who  knew 
nothing  of  the  theory  or  practice  of  steel-making. 

1  Harrington,  op.  cit.,  pp.  242-43. 

2  Watson  GriflSn,  "Canadian  Iron  and  Steel,"  Canadian  Mining  Jour- 
nal, vol.  XXI,  p.  208. 


ELEMENTS  OF  SUCCESS  AND  FAILURE         73 

Even  where  labor  was  secured,  men  gathered  together 
from  a  number  of  places  m  foreign  countries  had  to  learn 
how  to  work  together  and  to  make  use  of  materials  to  which 
they  were  not  accustomed.  Thus  even  experienced  men 
made  many  mistakes.  Is  it  not  a  wonder,  then,  that,  with 
lack  of  skilled  and  cheap  labor,  with  poor  and  inexperi- 
enced management,  with  strikes,  lack  of  energy,  cases  of 
high  and  unnecessary  expenses,  fraud,  graft,  and  accident, 
the  early  industry  was  not  a  complete  failure? 

§  7.  A  like  difficulty  was  the  lack  of  capital  so  important 
in  this  industry  which  requires  large  investments.  In  some 
cases  trouble  arose  from  inability  to  raise  sufficient  capital 
to  conduct  the  works  on  a  broad  and  expansive  scale.  Such 
failures  as  those  at  Marmora  in  1856  discouraged  English 
capital,  and  that  at  Madoc  in  1846  was  a  check  on  the 
investment  of  American  capital.  The  other  failures  were 
quite  sufficient  to  discourage  domestic  endeavors,  espe- 
cially when  other  industries,  more  adapted  to  the  country 
and  to  the  stage  of  industrial  development,  assured  more 
profit.  Ill-considered  and  excessive  expenditure  of  capital 
at  an  unfavorable  point  wrecked  certain  enterprises  at 
Marmora  and  Moisic.  At  other  times  failure  arose  from 
the  impossibility  of  securing  working  capital  at  a  critical 
moment. 

§  8.  Reference  has  been  made  already  to  the  fact  that 
the  lack  of  transportation  facilities  kept  up  the  local  mar- 
ket price  and  thus  protected  the  producer,  and  that  on 
other  occasions  the  improvement  of  transportation  pre- 
cipitated a  fall  of  prices  in  Canada.  Financial  and  business 
depressions  were  particularly  apt  to  leave  a  swath  of  fail- 
ures. When  prices  in  England  after  1846  fell  rapidly  to 
almost  half  the  price  obtainable  in  the  early  forties,  the 
furnace  at  Normandale  had  to  be  given  up  and  the  Mar- 
mora furnace  was  temporarily  closed.  In  the  fifties,  prices 


74    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

were  fairly  high;  pig  iron  rose  from  $24  per  ton  in  1852  to 
$37  in  1857.  After  a  short  depression,  prices  rose  rapidly  in 
the  middle  sixties.  They  were  high  again  from  1872  to 
1874,  pig  iron  selling  at  $50  per  ton,  and  a  number  of  iron 
furnaces  and  rolling  mills  were  put  in  operation.  General 
financial  depression  in  the  seventies,  combined  with  the  use 
of  bituminous  coal  in  the  United  States,  brought  the  prices 
of  iron  goods  tumbling  down.  At  Philadelphia  pig  iron  sold 
for  $18  a  ton  in  1877  and  1878.  Consequently,  the  Moisic 
Iron  Company,  the  Steel  Company  of  Canada,  the  Canada 
Car  and  Manufacturing  Company,  as  well  as  other  firms, 
went  out  of  business  or  became  insolvent.^ 

§  9.  Each  of  the  foregoing  factors  has  operated  at  some 
or  all  points  in  the  development  of  the  Canadian  iron 
industry,  and  brought  hopeful  beginnings  to  fruitless  dis- 
aster. But  to  appreciate  properly  the  development  of  a 
particular  industry,  we  must  give  due  consideration  to  the 
nature  of  the  market.  Like  most  Canadian  manufacturers, 
the  early  maker  of  iron  found  himself  cut  off  from  Great 
Britain  by  a  long  haul,  and  at  all  events  by  a  long  sea  voy- 
age. The  iron  from  Woodstock  was  shipped  to  England 
only  because  it  was  unique  in  quality  and  could  be  used  for 
making  armor  plate.  The  United  States  market  for  pig  and 
finished  iron  was  usually  barred  by  a  high  protective  tariff  .^ 
In  the  six  years  from  1821  to  1826,  the  British  American 
colonies  shipped  to  the  United  States  iron  and  steel  worth 
only  $54,707,  an  average  of  about  $9000  per  year.^  In  the 
two  years,  1850  to  1851,  Canada  exported  iron  and  steel 
worth  only  $39,000;  *  practically  all  of  it  to  the  United 
States.  By  1861  Canada  was  exporting  $466,420  of  iron 
and  steel,  and  in  the  prosperous  year  1873  an  equivalent  of 

1  See  Appendix  H. 

2  In  1824,  $18  per  long  ton;  $10  in  1852;  $7  per  short  ton  in  1870. 

'  United  States,  Report  of  the  Secretary  of  the  Treasury  on  Commerce  of 
British  North  America,  1851,  pp.  326-41. 

*  Andrews,  Report  on  Colonial  and  Lake  Trade,  1852,  p.  467. 


ELEMENTS  OF  SUCCESS  AND  F.ULURE         75 

$1,492,000.  Thereafter  exports  fell  off  to  an  average  of 
about  $600,000  per  year  for  the  last  half  of  the  decade. 
About  one  quarter  of  the  exports  in  1868  consisted  of  scrap 
iron  and  about  two  thirds  of  pig  iron.^  In  1871  the  exports 
of  iron  and  steel  amounted  to  $766,111  as  compared  with  a 
home  production  of  $10,177,911.  Obviously,  then,  Cana- 
dian producers  had  to  depend  largely  on  the  home  market.^ 
For  a  long  time  the  home  market  was  none  too  encourag- 
ing a  prospect.  When  iron  was  first  smelted  in  the  United 
States  in  1645,  Canada  had  a  population  of  less  than  3,000 
and  in  1763,  twenty-six  years  after  the  first  furnace  had 
begim  operations  in  Canada,  there  were  only  about  60,000 
people  in  the  country.  With  a  population  of  that  size  using 
a  few  iron  kettles  and  stoves,  and  a  few  cannons  and  mor- 
tars for  defensive  purposes,  and  with  the  people  scattered 
over  a  country'  where  transportation  was  mainly  by  water 
and  wagons,  the  opportunity  for  an  extensive  iron  industry 
was  small,  indeed.  On  the  other  hand,  a  large  and  growing 
population  in  the  British  colonies  to  the  south,  demanding 
iron  so  insistently  and  in  such  quantities  that  the  restric- 
tions of  the  Home  Government  failed  to  prevent  the  estab- 
lishment of  a  large  number  of  concerns  turning  out  finished 
products,  gave  the  New  England  ironmaker  a  market  be- 
yond all  comparison  with  that  of  his  Canadian  contempo- 
raries. \Mien  Geoi^e  Washington  became  President,  iron 
was  being  made  in  almost  every  State  in  the  United 
States;  there  was  but  one  small  furnace  in  Canada.^  At 
the  beginning  of  the  nineteenth  century-  the  population  of 
what  is  now  Canada  was  considerably  below  the  half-mil- 
lion mark;  some  twenty -five  years  later  it  had  increased  to 
900,000;  and  in  1851  it  was  over  2,300,000;  in  1871  it  was 
over  3,500,000,  and  in  1881  over  4,300,000.^   These  statis- 

^  United  States,  Commercial  Relations  of  the  United  States,  1868. 

*  See  Appendix  C,  Table  I,  and  Appendix  G,  Table  I. 

'  E.  Channing,  The  United  States  oj  America,  vol.  i,  p.  1. 

*  See  Appendix  A. 


76    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

tics  indicate  in  a  general  way  the  size  of  the  market  at 
various  times  for  such  manufactures  as  stoves,  kettles,  pots, 
and  other  iron  goods  in  general  use.  Contrast  with  this  the 
situation  in  the  United  States.  In  1790  there  were  nearly 
4,000,000  in  the  country,  nearly  eight  times  as  many  as  in 
Canada.  In  1850  there  were  25,000,000  people,  ten  times 
as  many  as  in  Canada,  and  in  1881  there  were  38,000,000, 
or  nine  times  the  population  of  Canada.  A  better  under- 
standing of  the  size  of  the  market  may  be  obtained  by  con- 
sidering the  number  of  plants  producing  various  finishing 
products.  Until  1850  the  general  extent  of  Canadian  manu- 
facturing was  not  great.  More  than  twice  as  many  people 
were  employed  in  agricultural  as  in  industrial  occupations.^ 
Sawmills  and  gristmills  constituted  the  chief  industrial 
enterprises  of  the  country,  and  until  these  began  to  use 
steam  instead  of  water  power,  and  until  other  kinds  of  in- 
dustries began  to  spring  up,  the  demand  for  iron  goods  for 
industrial  purposes  was  small. 

Even  before  1851,  however,  the  production  of  the  more 
highly  finished  iron  products  had  begun  in  Canada.  Most 
countries  have  produced  finished  iron  products  even  earlier 
than  such  intermediate  products  as  pig  iron  and  bar  iron, 
and,  as  we  have  already  seen,  many  of  the  earlier  forges  in 
Canada  were  producing  the  actual  finished  articles.  Be- 
sides these,  plants  were  established  to  produce  finished 
articles  from  scrap  iron,  pig  iron,  or  bar  iron.  The  produc- 
tion of  pig  iron,  of  course,  presumed  that  such  a  market 
existed. 

Satisfactory  statistics  regarding  various  kinds  of  prod- 
ucts are  not  available.  No  general  figures  are  at  hand  un- 
less the  items,  "machine  shop  and  foundry  products"  and 
"iron  and  steel  products"  may  be  regarded  as  satisfactorily 
inclusive.  While  these  items  by  no  means  represent  all  the 
endeavors  to  manufacture  iron  and  steel  products,  they 
may  be  accepted  as  of  some  significance  in  indicating,  in  a 
1  Census  of  Canada,  1871,  vol.  iv,  p.  193. 


ELEMENTS  OF  SUCCESS  AND  FAILURE        77 

general  way,  the  extent  of  the  Canadian  output  of  finished 
products  and  the  demand  for  raw  materials. 

In  1871  the  two  items,  "machine  shop  and  foundry  pro- 
ducts" and  "iron  and  steel  products,"  in  the  Census, 
amounted  to  over  $10,000,000.  By  1881  the  total  output 
of  iron  and  steel  products  amounted  to  $16,000,000.  An 
important  single  factor  in  expanding  the  demand  for  iron 
was  the  growth  of  railway  mileage  from  159  miles  in  1851 
to  7331  miles  in  1881.  The  Nova  Scotia  Steel  and  Forge 
Company  was  largely  the  product  of  the  opportunity  to 
supply  railway  iron  in  the  early  seventies  for  the  Inter- 
colonial Railway. 

On  the  other  hand,  a  surprisingly  large  part  of  the  de- 
mand for  iron,  finished  and  unwrought,  was  met  by  impor- 
tation. In  1844  iron  to  the  value  of  over  $1,500,000  was 
imported,  largely  from  the  United  Kingdom.^  In  1850  this 
item  amounted  to  $1,500,000;  in  1854,  to  about  $6,000,000; 
in  1858,  to  about  $2,500,000;  and  in  1862,  $1,500,000 
worth  was  imported.  In  the  sixties  the  annual  imports 
averaged  about  $5,000,000.^  In  the  early  seventies  the 
building  of  the  Intercolonial  Railway  brought  the  annual 
average  up  to  $20,000,000.  But  depression  followed  in  the 
second  half  of  the  decade,  and  imports  of  iron  and  steel  fell 
to  an  average  of  about  $10,000,000  per  year.  Thus  in  1881 
about  one  haK  of  the  consumption  of  iron  and  steel  pro- 
ducts was  manufactured  within  the  country.  A  modern 
mill  could  have  produced  the  total  imports  of  all  kinds,  but 
it  would  scarcely  have  represented  an  extensive  iron  and 
steel  industry. 

§  10.  It  has  been  quite  evident  that  the  tariff  duties  that 
existed  prior  to  1879  did  not  establish  in  Canada  a  great 
iron  and  steel  industry.  It  also  appears  that  conditions 
existed  which  would  themselves  have  prevented  the  exten- 

^  United  States,  Re-port  of  the  Secretary  of  the  Treasury,  op.  cit.,  p.  148. 
*  See  Appendix  A. 


78    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

sion  of  the  industry  except  under  the  stimulus  of  an  extra- 
ordinarily high  scale  of  duties.  The  narrowness  of  the 
market  prevented  the  development  of  plants  that  could 
compete  with  the  English  firms  producing  on  a  large  scale. 
If  the  Canadian  producers  could  scarcely  meet  British  and 
American  prices,  even  with  the  advantage  of  proximity  to 
the  market,  they  could  hardly  be  expected  to  meet  the 
same  producers  in  foreign  markets.  The  most,  therefore, 
that  a  rather  high  customs  tariff  could  possibly  have  done 
would  have  been  to  develop  a  small  Canadian  iron  and  steel 
trade  to  supply  the  limited  home  market. 

Would  high  protection  have  been  a  wise  policy  under 
such  circumstances?  The  answer  to  this  question  involves 
a  fundamental  principle  that  is  as  true  to-day  as  it  was 
fifty  or  thirty  years  ago.  Although  conditions  of  to-day 
may  warrant  high  protection,  the  principle  should  be  kept 
in  mind. 

New  countries  always  make  large  per  capita  investments 
in  the  form  of  imported  goods.  Iron  and  steel  products, 
used  in  so  many  industries  both  extractive  and  manufac- 
turing, form  a  large  part  of  this  investment.  Almost  every 
new  enterprise  demands  a  high  consumption  of  iron  in  its 
original  investment  and  in  its  operation.  Furthermore,  it  is 
desirable  that  such  capital  goods  should  be  obtainable  at 
as  low  a  cost  as  possible,  that  they  may  not  form  a  future 
burden  on  the  industry  of  a  country  until  replaced  by  less 
costly  materials  at  a  later  date.  The  wisdom  of  a  low-tariff 
policy  under  such  conditions  may  then  pass  unchallenged, 
especially  when  unfavorable  conditions,  as  we  have  already 
noted,  would  have  set  the  cost  of  an  adequate  home  pro- 
duction exceedingly  high.  The  natural  costs  of  transporta- 
tion were  protection  enough,  and  the  incidental  protection 
granted  by  the  revenue  tariff  was  a  gratuity  that  would 
probably  have  been  avoided  but  for  financial  reasons. 
That  the  iron  interests  were  not  large  enough  or  strong 
enough  to  influence  the  political  situation  is  additional 


ELEMENTS  OF  SUCCESS  AND  FAILURE        79 

evidence  that  a  high  protective  system  would  have  been 
ill-advised  during  this  early  period  of  Canada's  industrial 
development.  Whether  elements  were  introduced  to  render 
this  general  conclusion  invalid  for  more  recent  years  is  the 
main  problem  of  the  remainder  of  our  study. 


PART  THREE 

THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1879-1897 


CHAPTER  V 

THE   TAEIFF   AND   BOUNTY   SYSTEM 

§  1.  In  most  respects  the  year  1867  marks  the  beginning 
of  the  third  period  of  Canadian  economic  history.  The 
seventies,  as  well  as  the  early  eighties,  and  the  period  from 
1893  to  1897  were  years  of  general  industrial  depression: 
an  era  of  trial.  Hope  and  energy  were  often  defeated  by 
difficulty  and  discouragement.  The  adoption  of  the  na- 
tional policy  of  protection  in  1879,  however,  gives  some 
reason  for  distinguishing  the  years  1879  to  1897  from  the 
earlier  part  of  the  period.  For  our  purpose,  at  least,  in 
tracing  the  history  of  the  Canadian  iron  and  steel  industry 
in  its  relation  to  the  tariff,  we  shall  follow  such  a  division. 

The  protective  spirit  had  appeared  in  Canada  before 
1879.  In  the  fifties,  Isaac  Buchanan  had  organized  a 
movement  in  favor  of  high  protection.  The  tariff  acts  of 
the  early  sixties  admittedly  granted  some  incidental  pro- 
tection, and,  in  1871,  a  high  protective  tariff  had  been 
framed  and  put  into  force,  only  to  be  withdrawn  in  1872. 
But  the  depression  of  the  seventies  resulted  in  a  deficit  for 
the  Dominion  Treasury,  at  a  time  when  governmental 
expenditures  for  railroads  were  very  great.  Consequently, 
the  Conservatives,  who  had  attempted  to  introduce  pro- 
tection in  1871,  seized  on  the  opportunity  to  regain  power 
by  advocating  a  national  policy  of  protection  in  1878.  The 
scheme  was  a  success  beyond  expectations.  A  combination 
of  patriotic  feeling,  half -tacit  belief  in  the  protective  policy, 
and  the  natural  tendency  to  attribute  depression  to  the 
Government  in  power,  resulted  in  an  election  which  re- 
lieved the  Liberal  Party  of  the  duties  of  administration. 
By  1880  the  protective  policy  was  an  accepted  principle  in 


84    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  minds  of  the  greater  number  of  Canadian  people.^  The 
application  of  this  principle  to  the  iron  and  steel  industry 
is  the  subject  to  be  discussed  in  this  chapter. 

§  2.  Evidence  has  already  been  presented  to  establish 
the  fact  that  there  was  ample  room  for  the  development  of 
an  iron  industry.  In  1879  there  was  only  one  iron  plant  of 
importance  in  the  Dominion,  and  the  rolling-mill  industry 
was  far  from  supplying  the  needs  of  the  country.  The 
opportunity  to  develop  an  industry  was  accepted  by  the 
Conservatives  in  1879  when  they  introduced  the  national 
policy  of  protection  and  increased  the  duties  on  iron. 
Altogether,  thirty-one  items  were  mentioned  in  the  iron 
schedule.2  Pig  iron  was  admitted  at  $2  per  ton;  scrap  iron, 
at  12^  per  cent  ad  valorem,^  slabs,  blooms  and  billets,  muck 
and  puddled  bars,  at  12|  per  cent;  and  rolled  and  ham- 
mered bars,  at  17^  per  cent.  The  duties  on  other  articles 
varied  from  10  to  35  per  cent  as  follows :  Locomotive  steel 
tires,  10  per  cent;  hoops,  12|  per  cent;  iron  and  steel  wire, 
15  per  cent;  railway  fishplates  and  frogs,  17  per  cent;  stoves, 
castings,  and  car  wheels,  25  per  cent;  bolts,  nuts,  and  nails, 
30  per  cent;  screws,  35  per  cent. 

Mr.  McLean,  ui  his  "  Tariff  History  of  Canada,"  esti- 
mates the  average  rate  of  duty  from  1879  to  1887  at  20.78 
per  cent.*  If  the  duty  of  $2  per  ton  on  pig  iron  were  in- 
tended to  be  protective,  allowance  should  be  made  for 
other  provisions.  For  instance,  as  a  favor  to  New  Bruns- 
wick shipbuilders,  a  full  drawback  of  duties  paid  was  given 
on  iron  imported  and  used  in  composite  ships.^  The  duties 
on  bituminous  and  anthracite  coal  and  on  coke  were  in- 

1  It  has  been  said  the  Liberals  would  have  adopted  the  protective 
policy  had  the  Conservatives  not  done  so.  The  Liberal  Party  has  been 
accused  of  stealing  the  protective  policy  in  1897. 

2  42  Vic,  1879,  chap.  15;  see  Appendix  F. 
2  Equal  to  about  $2  per  ton. 

*  J.  A.  McLean,  The  Tariff  History  of  Canada,  p.  32. 
*■  House  of  Commons  Debates,  1879,  p.  1449. 


THE  TARIFF  AND  BOUNTY  SYSTEM  85 

creased  to  50  cents  per  ton  as  a  favor  to  Nova  Scotia  mines. 
The  duty  of  $2  per  ton  on  pig  iron  was  little  more  than 
compensation  for  the  increased  duty  on  fuel.  The  greatest 
increase  in  protection  was  given  to  the  industries  producing 
the  more  finished  products.  The  producers  of  raw  materials 
secured  protection  amounting  to  about  10  or  20  per  cent. 

From  1879  to  1887  there  was  no  general  tariff  revision. 
Now  and  then  some  change  in  an  item  was  made,  to  meet 
fiscal  needs  or  to  suit  protective  policy  or  political  neces- 
sity. In  1880  the  duties  on  slabs,  blooms,  and  billets  were 
reduced  from  12^  to  10  per  cent.  It  was  provided  that 
steel  ingots  should  be  admitted  free  for  another  year,  or 
until  they  were  manufactured  in  Canada,  at  which  time  a 
duty  of  $5  per  ton  was  to  be  imposed.  ^  In  1881  the  rate  on 
rolled  beams,  channels,  and  angles  was  reduced  from  15  to 
12|  per  cent,  and  the  rate  on  wrought-iron  tubing  was 
increased  from  15  to  25  per  cent.^  In  1882  iron  and  steel, 
old  scrap,  galvanized  iron  and  steel  wire  15  gauge  and 
under,  steel  rails,  bars,  and  fishplates  were  added  to  the 
free  list.^  Drawbacks  were  given  on  articles  used  in  the 
construction  of  the  Canadian  Pacific  Railway.^  As  a  sub- 
stitute for  the  duty,  to  offset  the  reductions  on  scrap  iron, 
and  to  avoid  a  readjustment  of  the  whole  schedule,  the 
Government  decided,  in  1883,  to  inaugurate  a  bounty 
system.  The  bounty  on  pig  iron  was  fixed  for  two  periods 
of  three  years  each  at  $1.50  per  ton  for  the  first  period,  and 
$1.00  for  the  second.^  Provision  was  made  for  regulating 
quantity  and  for  such  other  details  as  might  be  found 
expedient,  to  prevent  fraud  and  insure  the  good  effect  of 
the  act.^ 

In  1884,^  in  order  to  give  more  protection  to  the  steel 

»  43  Vic,  1880,  chap.  18. 

»  Budget  Speech,  1881,  February  18,  pp.  48-49. 

»  45  Vic,  1882,  chap.  6. 

*  45  Vic,  1882,  chap.  7.  ^  43  yic,  1880,  chap.  14. 

^  Journal  of  the  Iron  and  Steel  Institute,  1883,  no.  xii,  p.  796. 

^  47  Vic,  1884,  chap.  30. 


86    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

industry,  the  duty  on  steel  was  changed  from  $5  to  $3  per 
ton,  plus  5  per  cent.  The  rate  on  steel  rolled  wire  rods  for 
manufacturing  wire  was  reduced  from  15  to  5  per  cent; 
steel  and  iron  angles,  beams,  plates,  and  knees  for  ships 
were  placed  on  the  free  list.  In  1885  there  were  additions 
to  the  free  list  as  follows:  ^  Coke  used  in  Canadian  manu- 
facturing, steel  for  use  in  the  manufacture  of  skates,  hoop 
iron  for  the  manufacture  of  tubular  rivets,  and  steel  in 
sheets  for  manufacture  of  spades  and  shovels.  In  1886  ^ 
there  was  an  increase  of  duties  on  several  finished  products. 
Bolts,  nuts,  and  rivets  were  charged  1  cent  per  pound  plus 
15  per  cent.  The  duty  on  wrought-iron  tubing  was  in- 
creased from  25  to  35  per  cent.  Galvanized  iron  and  steel 
were  taken  from  the  free  list  and  taxed  20  per  cent.  Scrap 
iron  and  steel,  when  not  fit  for  actual  use,  were  admitted 
free.  At  the  same  time  the  payment  of  a  bounty  of  $1.50 
per  ton  on  pig  iron  was  extended  till  1890,  and  a  bounty  of 
$1.00  per  ton  thereafter  was  provided  for  till  1892.^ 

§  3.  The  crisis  in  the  movement  to  give  higher  protec- 
tion to  the  iron  industry  came  in  1887.  It  is  said  that  Nova 
Scotia  began  to  talk  of  secession  unless  her  industries  were 
as  favorably  treated  as  were  those  of  other  Provinces.  Con- 
sequently much  higher  protective  duties  were  introduced 
in  favor  of  the  iron  and  steel  industry.  Three  general  prin- 
ciples were  followed.  In  the  first  place,  the  American  tariff, 
which  was  supposed  to  be  a  carefully  worked-out  schedule, 
was  taken  as  the  basis  of  the  Canadian  duties,  two  thirds 
of  the  American  duties  in  general  being  imposed.  Pig  iron 
was  granted  the  protection  of  a  duty  of  $4  per  ton;  scrap 
iron  was  taxed  $2  per  ton;  bar  and  rolled  iron  were  made 
dutiable  at  $13  and  railway  fishplates  at  $12  per  ton.  An- 
other principle  was  that  of  not  pressing  too  hea\'ily  on  the 
railroad  industry.  The  third  was  the  substitution  of  specific 

1  Budget  Speech,  1885,  March  3,  p.  59. 

2  49  Vic,  1886,  chap.  18.  ^  49  yic,  1886,  chap.  38. 


THE  TARIFF  AND  BOUNTY  SYSTEM  87 

and  compound  for  ad  valorem  duties.  Shapes  for  bridge- 
building  were  made  dutiable  at  one  half  cent  per  pound 
plus  10  per  cent;  nuts,  washers,  and  bolts  at  one  cent  per 
pound  plus  25  per  cent.  A  35  per  cent  minimum  ad  valorem 
duty  was  frequently  added;  as  in  the  case  of  iron  and  steel 
forgings,  which  were  charged  l|  cents  per  pound,  with  a 
minimum  of  35  per  cent.  The  duty  on  steel  ingots  was 
increased  from  $3  plus  10  per  cent  to  30  per  cent,  with  a 
$12  minimum.  Wire  for  steel  spring,  formerly  on  the  free 
list,  was  charged  20  per  cent  because  it  was  now  being  made 
in  Canada.  Iron  and  steel  wire  for  fencing  of  a  kind  not 
made  in  the  country  was  placed  on  the  free  list.^ 

Thus  there  was  a  general  increase  in  protection,  few 
imports  escaping  increased  duties.  The  primary  industry 
received  an  increase  of  protection  amounting  to  $2  per  ton, 
and  producers  of  finished  products  were  favored  by  much 
more  than  a  compensatory  duty.  While  the  duty  on  bi- 
tuminous coal  was  maintained  in  favor  of  Nova  Scotia, 
anthracite  was  placed  on  the  free  list  in  the  hope  of  devel- 
oping and  extending  the  Ontario  iron  industry.^  As  rail- 
way development  was  of  enormous  importance  to  the 
country,  steel  rails  were  left  on  the  free  list. 3  Since  railway 
fishplates  were  being  manufactured  in  the  country  from 
imported  material  on  which  increased  duties  were  paid,^ 
the  producers  were  given  the  protection  of  a  duty  of  $12 
per  ton. 

The  year  1890  saw  an  alteration  here  and  there;  the  duty 
on  picks  and  mattocks  was  raised  from  35  per  cent  to  1  cent 
per  pound  plus  25  per  cent.  The  ad  valorem  duty  on  spades 
and  shovels  was  increased  by  5  per  cent.  Duties  on 
wrought  iron  and  steel  nuts,  washers,  rivets,  bolts,  and 
hinges  were  increased  by  3  per  cent.  Wrought  scrap  iron 
and  scrap  steel  were  charged  $2  per  ton.  Ferro-manganese, 
silicon,  spiegeleisen,  steel  bloom  ends,  and  crop  ends  of 

1  Debates,  1887,  p.  501.  ^  Ibid.,  p.  402. 

3   Ibid.,  p.  1043.  *  Debates,  1888,  p.  502. 


88    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

steel  rails  imported  for  the  manufacture  of  iron  and  steel, 
were  charged  $2.  At  the  same  time  the  bounty  on  pig  iron 
was  increased  from  $1  to  $2  per  ton,  and  extended  to  cover 
the  years  from  1892  to  1897. 

§  4.  In  1893  there  was  a  wide  demand  for  reduction  of 
the  Canadian  customs  duties,  especially  the  duties  in  the 
iron  schedule,  and  a  general  revision  resulted.  The  duty 
on  bar  iron  was  reduced  from  $13  to  $10;  on  puddled  bars, 
from  $9  to  $5;  on  iron  and  steel  screws,  from  35  to  30  per 
cent;  on  implements,  from  35  per  cent  to  20  per  cent;  on 
barbed  wire,  from  ih  cents  to  three  fourths  cent  per  pound. 
Pig  iron,  however,  remained  dutiable  at  $4  per  ton,  and 
the  duty  on  wrought  scrap  iron  was  increased  to  $3  for 
1895,  and  $4  thereafter.  Producers  of  spiegeleisen  suffered 
a  reduction  of  protection  from  10  to  5  per  cent.  Slabs, 
blooms,  and  billets  were  charged  $5  per  ton.  In  order  to 
include  material  brought  from  Great  Britain  as  ballast, 
cuttings,  clippings,  and  punchings  were  charged  $4  per  ton. 
Public  opinion  demanded  a  reduction,  especially  on  the 
finished  products,  like  agricultural  implements.  The  revi- 
sion tended,  therefore,  to  cheapen  the  finished  products  by 
reducing  the  duties,  but  the  rates  on  raw  materials,  pig 
iron  and  scrap  iron,  were  maintained  or  raised. 

The  bounty  of  $3  per  ton  on  pig  iron  was  continued  for 
five  years  for  furnaces  then  in  operation,  and  was  to  be 
paid  for  five  years  after  the  beginning  of  operations  to 
furnaces  built  thereafter.  Thus,  while  the  rate  of  bounty 
was  not  increased,  its  operation  was  extended  and  made 
more  effective.  Furthermore,  as  compensation  for  the 
reduction  in  the  customs  duties,  the  law  provided  for  a 
bounty  of  $2  per  ton  on  puddled  bars  and  steel  billets  made 
in  Canada  from  Canadian  pig  made  from  Canadian  ore. 
The  manufacturers  had  to  submit  satisfactory  evidence 
that  the  claims  were  correct.^  Later,  in  1896,^  the  pig-iron 

1  57-58  Vic,  1893,  chap.  9.         *  60-61  Vic,  1896,  chap.  6. 


THE  TARIFF  AND  BOUNTY  SYSTEM  89 

bounty  system  was  extended  by  making  it  applicable  to 
all  iron  made  in  Canada,  in  proportion  to  the  percentage 
of  domestic  ore  used.  The  manufacturers  claimed  that 
Canadian  ore  was  too  uniform  in  quality  to  permit  the 
production  of  all  the  grades  of  iron  required.  Moreover, 
the  furnace  which  the  Nova  Scotia  Steel  Company  had 
built  at  Ferrona,  Nova  Scotia,  was  using  Newfoundland 
ore,  and  the  Hamilton  Blast  Furnace  Company  was  im- 
porting considerable  quantities  of  ore  from  the  Lake 
Superior  district.^  Although  the  law  affected  only  the 
proportion  made  from  Canadian  ore,  it  paved  the  way  for 
larger  claims,  and  a  further  extension  by  the  Liberals,  in 
1897. 

§  5.  Meanwhile,  the  Provinces  and  municipalities  were 
also  giving  aid  to  the  iron  and  steel  industry.  As  a  result 
of  a  deputation  to  Sir  Oliver  Mowat,  Prime  Minister  of 
Ontario,  urging  that  a  provincial  bonus  of  $2  per  ton  be 
granted  on  pig  iron  made  from  Ontario  ore,  Ontario  insti- 
tuted a  bounty  system.  A  mining  fund  of  $125,000,  out  of 
which  a  bounty  of  $1  for  each  short  ton  of  pig  metal  might 
be  paid  for  five  years  after  July  1,  1894,  was  set  aside  for 
producers  of  iron  ore.  Not  more  than  $25,000  was  to  be 
paid  each  year,  and,  if  the  ore  mined  and  smelted  exceeded 
the  equivalent  of  25,000  tons  of  pig  iron,  the  bounty  per 
ton  was  to  be  proportionately  reduced.^  In  spite  of  the 
fact  that  the  bounty  was  payable  to  the  miners  of  iron  ore, 
the  furnace-men  were  able  to  secure  nearly  all  the  benefit, 
since  the  competition  of  the  miners  usually  reduced  the 
price  of  the  ore  by  the  extent  of  the  bounty.^ 

In  1895  Quebec  passed  "An  Act  Respecting  the  Coloni- 
zation of  Certain  Parts  of  the  Province  and  for  promoting 
the  Mining  Industry  Therein."  The  Canada  Iron  Furnace 

^  Iron  Age,  vol.  lviii,  p.  58. 

*  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  196. 

*  Monetary  Times,  vol.  lxxx,  p.  610. 


90    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Company  was  virtually  made  a  colonization  society,  and 
30,000  acres  of  woodland  were  set  aside  or  reserved  for 
purposes  of  colonization  by  the  employees  of  the  com- 
pany. The  industry  was  thus  protected  from  woodland 
speculators  and  was  assured  of  a  constant  supply  of 
fuel.i 

Municipalities  also  offered  special  inducements  to  this 
industry  in  the  form  of  exemptions  from  taxation,  bonuses, 
and  free  sites;  and  railroads  offered  attractive  freight  rates. 
Pictou,  Nova  Scotia,  gave  the  Pictou  Charcoal  Iron  Com- 
pany a  subsidy  of  $20,000  and  a  twenty-year  exemption 
from  taxation.  Hamilton  was  even  more  generous  in  grant- 
ing the  Hamilton  Blast  Furnace  Company  a  site  of  seventy- 
five  acres  of  land  at  a  cost  of  $35,000,  a  bonus  of  $40,000  in 
city  debentures,  and  a  bonus  of  $60,000,  if  steel-works  were 
built.2 

§  6.  Such  is  a  general  outline  of  the  government  aid  given 
to  the  iron  and  steel  industry  under  the  first  period  of  the 
application  of  the  national  or  protective  policy.  It  remains 
now  to  consider  the  merits  of  the  policy  adopted  as  well  as 
those  features  which  tended  to  make  it  useless  or  even 
opposed  to  the  interests  of  Canadian  industrial  develop- 
ment. 

When  the  national  policy  was  first  introduced,  and  when 
it  was  extended  from  time  to  time,  the  usual  arguments 
were  urged  in  its  favor.  The  Government  expected  a  great 
development  of  the  iron  and  steel  industry.  For  instance. 
Sir  Leonard  Tilley  in  1879  prophesied  the  introduction  of  a 
new  process  by  which  the  phosphorus  and  sulphur  in  iron 
ore  could  be  removed  by  the  application  of  heat  from  pe- 
troleum. He  expected  that  the  iron  industry  would  spring 
up  all  over  the  country  and  with  most  beneficial  results.^ 

1  Canadian  Engineer,  vol.  iii,  p.  290. 

*  Canadian  Mining  Review,  vol.  in,  p.  21. 

«  Budget  Speech,  1879,  p.  13. 


THE  TARIFF  AND  BOUNTY  SYSTEM  91 

Sir  Charles  Tupper  was  even  more  hopeful,  in  1887,  when 
he  said  that  iron  plants  in  the  Northwest  Territories  and 
in  British  Columbia  would  swell  the  Canadian  output.  ^ 

Probably  the  most  important  and  legitimate  justifica- 
tion of  this  policy  in  this  early  period  lay  in  the  hope  of 
developing  Canada's  enormous  natural  resources;  a  stock 
argument  accepted  by  miners,  manufacturers,  laborers, 
farmers,  and  the  consuming  pubHc  alike.  The  Government, 
in  "taking  into  consideration  the  enormous  iron  interests 
of  the  country,"  was  considering  the  large  deposits  of  ore 
adjacent  to  inexhaustible  coal-beds  in  Nova  Scotia.  In 
every  Province  of  Canada,  as  we  have  seen,  there  were 
large  deposits  of  iron  ore.  Quite  as  important  as  the  bene- 
fit to  the  miners  of  iron  ore  was  the  stimulus  expected  for 
the  coal  industry.  Statistics  were  quoted  to  show  that  in- 
creased production  of  iron  always  brings  a  large  increase 
in  the  coal  output.  The  coal  industry  would  be  taxed  to 
its  full  capacity  to  furnish  the  additional  output  required. 
Consequently,  in  1887,  when  the  Government  hoped  to 
encourage  the  iron  industry  of  Ontario  and  to  check  the 
exportation  of  Ontario's  ores  to  the  United  States,^  it  felt 
free  to  abolish  the  duty  on  anthracite  coal. 

The  Government  hoped,  too,  that  protection  to  the  iron 
and  steel  industry  would  entirely  sweep  away  Canada's  so- 
called  "unfavorable  balance  of  trade."  In  1887  Mr.  Tup- 
per quoted  statistics  to  show  that  Canada's  excess  of  im- 
ports was  practically  equal  to  her  imports  of  iron  and  steel 
products.^  Why  should  not  the  Canadian  industry  supply 
the  whole  demand  and  sweep  away  the  unfavorable  bal- 
ance? This  argument  was  particularly  appropriate  in  view 
of  the  fact  that  American  ironmakers  were  selling  in  Can- 
ada at  slaughter  prices.  In  1879  circulars  had  stated  that 
Americans  would  sell  iron  at  a  price  10  per  cent  below  the 

1  Budget  Speech.  1887.  March  30,  pp.  49-51.     ■ 
'  Ibid.,  pp.  45-51. 
»  Ibid.,  pp.  49-51. 


92    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

price  at  the  furnace  at  Londonderry,  Nova  Scotia.^  In 
1889  the  nail  trade  of  the  United  States  was  reported  to  be 
in  such  a  flourishing  state  that  a  reduction  of  Canadian 
protection  would  have  ruined  the  Canadian  mills.  We 
find,  however,  that  in  1893  to  1895  Canadian  plants  were 
able  to  continue  production,  despite  the  fall  in  prices  and 
unwonted  stress  of  competition  with  iron-men  of  the 
United  States.  Unquestionably  Canadian  mills  benefited 
to  the  extent  of  learning  a  few  secrets  of  economy  to  stand 
them  in  good  stead  thereafter,  yet  the  dumping  of  Ameri- 
can products  naturally  gave  rise  to  a  demand  for  an  in- 
crease of  protection. 2 

Protection  was  to  be  a  boon  to  another  general  interest 
—  the  laboring  class.  As  we  have  seen,  the  tariff  of  1887, 
based  on  the  American  iron  and  steel  schedule,  gave  pro- 
tection in  proportion  to  the  amount  of  labor  involved  in 
production,  least  on  raw  materials,  more  on  intermediate 
products,  and  most  on  finished  articles. 

The  development  of  the  iron  and  steel  industry  would 
undoubtedly  mean  employment  for  more  labor  in  mining, 
transportation,  machinery,  coal  mining,  quarrying,  and 
building  industries.^  The  development  of  a  charcoal  iron 
industry  would  increase  the  demand  for  charcoal,  and  thus 
would  prove  of  value  to  the  agricultural  communities  from 
which  the  charcoal  might  be  secured.  Furthermore,  as 
the  producer  of  pig  iron  could  not  fall  back  on  other  pro- 
ducers to  recoup  himself  for  losses  sustained  in  times  of 
depression,  he  could  only  cut  down  wages  of  the  men  em- 
ployed. As  the  manufacture  of  pig  iron  involved  the  em- 
ployment of  much  labor,  such  a  course  was  not  desirable; 
consequently  protection  should  be  granted  the  industry  in 
proportion  to  the  amount  of  labor  used.^ 

^  Iron  Age,  vol.  lvi,  p.  992. 

*  Bulletin  of  the  Iron  and  Steel  Association,  1886,  vol.  xx,  p.  1. 
'  Ontario,  Report  of  Royal  Commission  on  Mines,  p.  216. 

*  Canadian  Mining  Review,  vol.  xv,  p.  172. 


THE  TAKIFF  AND  BOUNTY  SYSTEM  93 

As  if  the  protective  principle  were  none  too  sound  fun- 
damentally, a  few  other  arguments  were  tacked  on.  The 
tariff  of  1887  was  said  to  be  partly  a  revenue  measure.^  In 
1893  it  was  agreed  that  protection  was  necessary  to  offset 
the  freight  on  Nova  Scotia's  shipments  of  iron  to  Ontario. 
As  Nova  Scotia  ordinarily  paid  $4.50  a  ton  for  shipping  iron 
to  Ontario,  by  either  rail  or  water,  iron  shipped  from  Buf- 
falo to  Ontario  was  scarcely  at  a  disadvantage  after  paying 
the  duty.  Inland  freight  on  British  iron  was  also  much  less 
than  on  domestic  iron,  so  that  the  duty  was  at  least  half 
neutralized  by  greater  costs  of  transportation. ^ 

The  Government  pointed  out,  too,  that  to  start  an  iron 
industry  on  an  important  scale  in  any  country,  however 
favorable  the  natural  conditions,  state  aid  by  bounty  or 
tariff  protection,  or  both,  had  been  found  necessary,  and 
that  those  countries  which  had  protected  the  industry  were 
then  the  large  producers  of  iron.^  The  iron  industry  of 
Great  Britain  was  supposed  to  have  been  developed  by 
high  protective  duties;  the  influence  of  technical  inventions 
and  free  raw  materials  was  entirely  overlooked.*  The 
American  iron  industry  was  taken  as  a  further  illustration 
of  the  benefits  of  protection;  it  was  convenient  to  omit  the 
fact  that  the  early  iron  trade  of  the  United  States  was  de- 
veloped along  the  eastern  seaboard  under  extraordinary 
conditions,  and  that  a  high  tariff  did  not  save  it  so  far  as 
those  localities  were  concerned.^  The  need  for  some  en- 
couragement was  fully  explained  on  the  ground  that  all 
iron  industries  are  handicapped  at  first  by  very  heavy 
initial  expenditure  in  prospecting,  construction  of  plant, 
securing  and  developing  mines,  woodlands,  quarries,  and 
shipping  docks.  The  Government,  therefore,  thought  it 
imperative  that  it  should  give  stability  to  the  tariff  and  so 
invite  the  confidence  of  capitalists.^   While,  theoretically, 

1  Delates,  1887,  p.  1208.  2  Iron  Age,  vol.  Li,  p.  1291. 

»  Canadian  Engineer,  vol.  i,  p.  246.       *  Debates,  1903,  p.  4264. 

^  Ihid.,  p.  4289.  ^  Canadian  Engineer,  vol.  iii,  p.  289. 


94    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

such  was  the  poHcy,  in  practice  the  reverse  obtained.  For 
instance,  in  1894,  Mr.  Foster  gave  an  increase  of  protection 
to  iron  and  steel  wire  manufacturers  who  had  finished  all 
experimenting  and  had  begun  to  manufacture  extensively.  ^ 
In  other  words,  the  practice  seemed  to  be  to  grant  protec- 
tion, not  to  infant  industries,  but  to  industries  that  had 
already  assumed  considerable  importance. 

§  7.  Meanwhile  the  duties,  especially  those  of  1887, 
were  under  much  discussion.  This  discussion  ended  during 
the  years  1893  to  1896,  in  a  general  demand  for  reduction.^ 
Of  course,  some  asked  for  much  higher  protection  for  the 
primary  products  and  prohibitive  duties  on  substitutes. 
On  the  other  hand,  manufacturers  for  whom  these  goods 
were  raw  materials  were  anxious  to  secure  them  as  cheaply 
as  possible.  Consumers,  too,  were  anxious  to  secure  the 
finished  products  at  low  prices,  but  the  manufacturers  of 
such  products  wanted  adequate  protection. 

It  is  natural,  then,  that  the  first  discussion  centered 
around  the  effect  of  the  duties  of  1879.  Since  there  was 
only  one  producing  plant  in  the  country  at  this  time,  — 
that  at  Londonderry,  —  it  was  claimed  that  the  duty  was 
protecting  a  monopoly  and  that  the  Londonderry  company 
kept  the  price  15  to  30  cents  per  hundredweight,  or  $2  per 
ton,  higher  than  Liverpool  prices.  It  took  advantage  not 
only  of  the  duty,  but  even  of  the  insurance  against  rust 
during  transportation  of  iron  from  Europe.  Prices  for  pig 
iron  advanced  as  English  prices  advanced.^   Although  the 

^  Debates,  1894,  p.  2513.  ^  Canadian  Engineer,  vol.  i,  p.  246. 

3  Prices  of  pig  iron  1878-81  (per  100  Ws.) 

1878     1879     1880    1881 

English  iron  at  Montreal,  duty  not  paid 1.63     1.89      1.70 

Londonderry  iron 1.80     2.15      2.00 

Londonderry  iron  at  St.  John,  N.B 1.90    2.10     2.45      2.20 

Prices  of  nail  sheet  at  Montreal  1878-81  {per  100  lbs.) 

English  iron,  duty  not  paid 1.70     1.70     2.05      1.70 

Londonderry  iron 1.80    1.80     2.15      1.85 

—  Debates,  1882,  pp.  1217-19. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM      95 

increase  of  the  price  of  pig  iron  may  have  been  partly  due 
to  the  high  quality  of  Londonderry  iron,  some  share  of  it 
certainly  was  due  to  the  increase  of  customs  duty,  especi- 
ally as  the  margin  of  profit  changed  with  the  increase  of 
protection  from  17  cents  per  hundred  pounds  in  1879  to  30 
cents  in  1881.  When  bar  iron  at  Philadelphia  was  sold  for  a 
little  over  $1  per  hundredweight  in  1885,  it  was  quoted  at 
Montreal  at  $2.05  to  $2.15.  Evidently  the  Canadian  price 
was  the  Philadelphia  price  plus  transportation  charges  and 
most  of  the  duty.  The  price  of  pig  iron  at  Montreal,  as 
compared  with  the  price  at  Ferrona,  was  almost  regularly 
higher  by  the  amount  of  the  transportation  charges.  Thus, 
the  price  of  iron  in  Canada  seems  to  have  been  the  foreign 
price,  plus  costs  of  transportation,  and  a  considerable  part 
of  the  tariff.  Similar  results  seem  to  have  followed  the  re- 
visions of  1887  and  1894.  In  1887  the  bar-iron  price  list 
was  advanced  25  to  33  per  cent.  The  Massey-Harris  Com- 
pany declared  that  bar  iron  and  steel  had  advanced  $10  to 
$15  per  ton,  pig  iron,  $2  to  $5  per  ton,  and  everything  else 
in  proportion  to  the  duties. 

A  comparison  of  prices  of  Canadian  iron  at  Ferrona, 
American  and  Scotch  iron  at  Chicago,  and  No.  1  Sum- 
merlee  iron  at  Montreal  shows  that  the  high  level  was 
maintained  in  Canada.^  Previous  to  1894  the  price  of 
iron  at  the  furnaces  at  Ferrona  averaged  $2  to  $4  per 
ton  more  than  the  price  at  Chicago.  After  1894  when 
*  Average  Monthly  Prices  of  Pig  Iron,  1888-96. 


Canadian  iron 

American  iron 

Scotch  iron 

No.  1  Summerlee  iron 

at  Ferrona 

at  Chicago 

at  Chicago 

at  Montreal 

1888  . 

$16-18 

$17.20 

$  9.71 

$20.30-24.50 

1889 

17-18 

15.80 

11.60 

21.00-25.00 

1890 

18-19 

16.75 

12.00 

21.00-21.50 

1891 

16-17 

15.00 

11.45 

18.25-19.00 

1892 

15-16 

14.00 

10.18 

18.00-19.00 

1893 

13-14 

13.00 

10.28 

19.00-20.00 

1894 

12-13 

10.50 

10.38 

18.50-20.00 

1895 

11-15 

9.50 

10.80 

18.50-20.00 

1896 

14-15 

10.50 

11.56 

17.00-18.50 

Canadian  Mining  Manual,  1897,  pt.  ii,  pp.  75-76. 


96    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  scrap  iron  duty  was  increased  the  margin  of  dif- 
ference increased.  The  difference  in  price  between  Sum- 
merlee  iron  at  Montreal,  that  is  when  dehvered  at  the 
chief  Canadian  market,  and  American  iron  at  Chicago 
was  even  greater.  Clearly  the  protective  policy  caused 
an  increase  in  the  prices  of  iron  and  steel  and  with  a  few 
exceptions  prices  were  maintained  at  a  higher  level  than 
in  other  countries  practically  throughout  the  period. 
The  "  Canadian  Mining  Review  "  estimated  that  over 
two-thirds  of  the  duty  was  used  to  protect  home  in- 
dustry.^ 

If  we  turn  now  to  the  finished  products,  a  somewhat  dif- 
ferent situation  is  found.  A  very  rapid  addition  to  the 
number  of  producing  plants  resulted  in  such  an  increase  of 
production  that,  in  1891,  the  least  weakness  of  the  market 
led  to  excessive  price-cutting.  The  organization  of  bar 
iron,  nail,  bolt  and  nut,  and  shovel  associations,  which  kept 
up  prices  more  or  less  successfully,  naturally  followed. 
Consequently  the  tariff  was  at  least  partially  responsible 
for  combinations  and  high  prices.  The  protective  iron 
schedule  of  the  tariffs  of  1879  and  1887  can  be  said  to  have 
afforded  considerable  protection  to  the  iron  and  steel  in- 
dustry, in  short,  a  protection  that  found  expression  in  higher 
prices.  Low  prices  were  secured  only  when  the  American 
and  British  iron  markets  were  so  disorganized  that  the 
Canadian  producer  was  forced  to  lower  his  prices,  at  which 
time  he  made  full  use  of  the  tariff. 

§  8.  Probably  one  of  the  most  objectionable  features  of 
protection  was  the  use  of  specific  and  compound  duties, 
with  an  ad  valorem  minimum  of  35  per  cent  in  many  cases. 
The  stated  object  of  these  duties  was  to  prevent  under- 
valuation. Specific  duties  were  warmly  befriended  as  the 
only  fair  and  sensible  duties  on  pig  iron,  since  it  is  very 
often  impossible  for  the  appraiser  to  determine  the  value 
^  Canadian  Mining  Review,  vol.  xv,  p.  72. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM      97 

of  pig  iron,  and  since  specific  duties  do  away  with  all  possi- 
bility of  fraud.  Further,  as  a  specific  duty  prevents  the 
importation  of  the  lower  grades  of  pig  iron,  the  quality  of 
work  is  improved.^  Though  the  Customs  Act  provides  for 
the  use  of  sworn  invoices,  where  it  is  necessary  to  secure 
the  exact  price  of  the  goods,  this  does  not  always  result  in 
the  specific  duties  preventing  fraud.  The  great  objection 
to  specific  duties  lies  in  the  fact  that  with  the  marked 
decline  in  prices  that  took  place  between  1880  and  1896,  the 
protection  afforded  gradually  increased,  and  amounted,  as 
Sir  Wilfrid  Laurier  said  in  1894,  to  between  40  and  60  per 
cent  for  such  lower  grades  as  Alabama  coke  iron.  That 
Mr.  Foster  was  unable  to  explain  and  justify  specific  items 
in  the  tariff  of  1894  ^  makes  one  suspicious  that,  as  the 
farmers  have  often  claimed,  the  schedule  was  framed  by 
some  committee  of  manufacturers  and  each  item  given  the 
protection  asked  without  further  question.  Altogether, 
one  gathers  the  impression  that  the  claim  that  these  spe- 
cific duties  were  used  to  obscure  the  real  degree  of  protec- 
tion has  a  considerable  basis  of  truth.  In  many  cases  the 
duties  were  really  prohibitive  of  importation;  at  best  they 
made  an  estimate  of  the  amount  of  protection  given  almost 
impossible. 

§  9.  As  has  been  said,  it  was  expected  that  the  importa- 
tion of  iron  and  steel  would  largely  discontinue.  Let  us 
turn,  then,  for  a  moment  to  the  influence  of  the  tariff, 
especially  that  of  1887,  on  these  imports.  Altogether  there 
was  a  decrease  in  imports  from  $75,251,232  for  the  period 
1882  to  1886  to  $70,972,717  for  the  period  from  1889  to 
1893.^  Iron  and  steel  goods,  partially  manufactured  and 
for  use  as  raw  materials,  were  imported  in  large  amounts, 
averaging  about  $5,000,000  annually  from  1877  to  1896. 
Imports  of  iron  and  steel  goods  ready  for  consumption 

*  Canadian  Engineer,  vol.  iii,  p.  290.  *  Debates,  1894,  p.  2513. 

•  Canadian  Mining  Review,  vol.  xiii,  pp.  42-43. 


98    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

amounted  to  $6,000,000  in  1877,  $10,000,000  in  1887,  and 
$5,000,000  in  1896. ^  Meanwhile  the  unfavorable  balance 
of  trade  had  fallen  from  $24,000,000  in  1877  to  $17,000,000 
in  1882,  to  $20,000,000  in  1888,  and  had  become  a  favor- 
able balance  of  $3,000,000  in  1896.2  ^j^^  character  of 
Canada's  trade  relations  had  changed,  but  so  far  as  figures 
show,  despite  the  iron  trade  rather  than  because  of  it. 

If  we  turn  to  pig  iron  in  particular,  we  find  an  actual 
increase  of  importations.  In  1884,  52,184  tons  were  im- 
ported; in  1887,  50,214  tons;  in  1890,  87,613  tons;  in  1893, 
63,522  tons.'  Of  course  this  continuance  of  importation  of 
iron  can  be  easily  explained.  Even  if  furnaces  could  have 
been  built  to  produce  all  the  country's  consumption  of  iron, 
approximately  100,000  tons  in  the  nineties,  which  could 
have  been  produced  by  one  large  modern  furnace,  or  by 
two  or  three  furnaces  of  that  period,  capitalists  would  have 
had  little  temptation  to  erect  the  furnaces.  The  market 
was  very  scattered,  and  very  apt  to  be  an  aggregate  of 
small  orders.  In  some  work,  such  as  castings,  Canadian 
iron  could  scarcely  be  used  at  all  because  Canadian  fur- 
naces did  not  turn  out  the  necessary  grade.  No  furnace 
could  turn  out  all  grades  from  Bessemer  to  foundry  iron. 
In  short,  there  was  little  hope  for  good  returns  on  an  in- 
vestment in  the  Canadian  pig-iron  business,  and  no  matter 
what  the  ambitions  of  Canadian  producers,  Canada  could 
not  have  got  along  well  without  importing  some  American 
or  British  pig  iron. 

§  10.  Opposition  to  the  duties  on  pig  iron,  scrap  iron, 
and  bar  iron  was  particularly  strong.  Very  important  inter- 
ests objected  to  the  principle  that  these  raw  materials  for 
nearly  every  other  Canadian  industry  should  be  taxed. 
On  these  grounds  Mr.  Bourassa  and  Mr.  Charlton^  ob- 

^  Canadian  Statistical  Year-Book,  1904. 

2  Canada  Year-Book,  1912,  p.  94. 

3  See  Appendix  G.  ^  Debates,  1879,  p.  1447. 


,  HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM      99 

jected  to  the  duties  in  1879,^  In  1881  Mr,  Burpee,  a  rolling- 
mill  owner  from  St.  John,  New  Brunswick,  and  in  1887, 
J.  Pender  &  Co.,^  of  St.  John,  protested  that  the  prices  of 
these  raw  materials  were  rising  and  were  likely  to  ruin 
certain  branches  of  the  trade.  In  1892  Mr.  J.  V.  Hodgson, 
of  Montreal,  the  only  manufacturer  of  wrought-iron  tubing 
in  Canada,  closed  his  works  indefinitely  because  the  high 
duty  on  his  raw  material  made  the  industry  unprofitable. 
Likewise,  the  manufacturers  of  agricultural  implements, 
the  most  important  producers  of  finished  products,  com- 
plained that  the  rolling  mills  had  prospered  under  the 
protection  of  35  per  cent,  until,  becoming  too  extensive  for 
the  consuming  capacity  of  the  country,  they  had  failed  and 
later  formed  combinations.  Thereafter  the  rolling  mills 
fully  utilized  the  duties  on  bar  iron,  getting  not  only  what 
was  intended  for  themselves,  but  also  what  was  intended 
for  the  miners,  the  pig-iron  producers,  and  even  the  pro- 
tection that  was  intended  for  the  producers  of  finished 
products.  Accordingly,  the  producers  of  finished  products 
wanted  to  have  the  duties  on  bar  iron  reduced  to  enable 
them  to  enter  the  domestic  and  export  trade  on  fair  terms 
with  other  countries. 

One  can  easily  see  how  these  high  duties  would  injure  the 
production  of  finished  products,  but  it  is  not  so  evident  at 
once  that  the  producers  of  pig  iron  and  puddled  bars  could 
not  get  the  full  benefit  of  the  increase  of  duties  after  1887. 
The  secret  lies  in  the  relatively  low  duty  on  wrought  scrap 
iron,  which  was  admitted  at  $2  per  ton  (the  previous  duty 
on  both  pig  iron  and  scrap),  while  pig  iron  and  puddled 
bars,  with  which  scrap  iron  came  into  competition,  were 
charged  $4  and  $9  respectively  after  1887.  The  Govern- 
ment naturally  intended  to  encourage  the  manufacture  of 
bar  iron  from  puddled  bars  made  in  Canada  from  Canadian 
pig  iron,  but  the  discrimination  in  favor  of  imports  of  scrap 
iron  went  far  to  nullify  the  additional  protection  afforded 
1  Debates,  1882,  p.  1223.  «  Ibid,  1887,  p.  1213. 


100    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

pig  iron  and  puddled  bars.  The  rolling-mill  interests  were 
able  to  secure  an  abundance  of  raw  materials  at  prices 
much  lower  than  were  profitable  for  iron  smelters  and  man- 
ufacturers of  puddled  bars.  In  fact,  nearly  all  the  raw 
material  for  bar  iron  and  casting  work  was  imported.  Thus, 
deprived  of  a  profitable  market  for  forge  iron  and  puddled 
bars,  capitalists  did  not  dare  to  establish  puddling  works 
commensurate  with  the  Canadian  consumption.  As  a  con- 
sequence, no  bar  iron  was  manufactured  from  Canadian 
puddled  bars  until  after  1894,  when  the  scrap-iron  duty 
was  raised  to  $4  per  ton.  In  turn,  the  development  of  the 
pig-iron  industry  was  limited  to  the  demand  for  pig  iron 
for  foundry  work  and  for  steel-making  purposes.  Thus, 
although  the  bulk  of  the  bar  iron  used  in  Canada  was 
turned  out  by  Canadian  mills,  the  few  Canadian  blast  fur- 
naces and  puddling  works  were  not  continuously  in  blast 
for  any  length  of  time.^ 

Those  interested  in  pig-iron  production  soon  began  to 
protest  against  this  apparently  unjust  discrimination. 
They  argued  that  it  was  impossible  to  manufacture  good 
bar  iron  from  wrought  scrap,  and  claimed  that  merchant 
iron  rolled  from  old  rails,  tubes,  boiler  plate,  old  ship 
plates,  railroad  springs,  discarded  axles,  and  similar  ma- 
terial was  in  no  respect  equal  to  iron  made  from  puddled 
bar,  and  that  every  manufacturer  who  used  iron  made  from 
scrap  knew  to  his  sorrow  that  the  product  was  never  regular 
in  texture  and  grain,  had  hard  and  soft  spots  in  it,  and  was 
reedy  and  open-grained.  They  believed  that  had  the  mill 
proprietors  been  forced  by  a  heavy  duty  on  scrap  iron  to 
put  in  puddling  furnaces  or  to  buy  puddled  bars  from  pig- 
iron  producers  who  turned  pig  iron  into  bars,  both  the  pro- 
ducers and  consumers  of  finished  products  would  benefit  by 
reason  of  the  better  quality  of  finished  goods.  The  pro- 
ducers of  pig  iron  argued  that  the  rolling-mill  men  had 
even  been  forced  to  invest  in  special  plants  for  the  treat- 
^  Iron  Age,  vol.  li,  p.  430. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM     101 

ment  of  scrap  iron.^  In  reply  the  rolling-mill  owners  said 
that,  as  a  matter  of  fact,  to  secure  a  satisfactory  product, 
scrap  iron  had  to  be  mixed  with  pig  proper,  and  thus  scrap 
iron  to  some  extent  facilitated  the  use  of  pig  iron.^  The 
same  rolls  could  be  used  whether  bar  iron,  scrap  iron,  or 
puddled  bars  were  used,  and  even  if  the  duty  on  scrap  were 
raised  to  a  prohibitory  point,  the  domestic  producers  of 
pig  iron  could  not  have  profited  greatly,  since  much  of 
the  scrap  iron  was  purchased  in  the  country,  and  since 
producers  of  puddled  bars  had  not  the  facilities  to  produce 
a  large  enough  output  at  the  price  at  which  bars  could  then 
be  imported.^ 

Down  to  1892  there  were  but  three  blast  furnaces  in 
Canada;  two  in  Quebec,  and  one  in  Nova  Scotia.  But,  as 
we  shall  see,  the  Canada  Iron  Furnace  Company  had  taken 
over  the  plant  at  Radnor  in  1889,  the  New  Glasgow  Coal, 
Iron  and  Railway  Company  built  a  furnace  in  1892,  and 
the  Hamilton  Blast  Furnace  Company  was  contemplating 
building  in  1893.  The  necessity  of  increasing  the  duty  on 
scrap  iron  was  urged  with  new  vigor.  It  was  proposed,  in 
1892,  that  the  diflBculty  should  be  rectified  by  naming  a 
date  on  which  scrap  iron  should  be  charged  the  same  duty 
as  puddled  bars  or  soft-steel  billets,  and  that,  in  the  mean 
time,  a  bounty  should  be  paid  on  puddled  bars  and  steel 
billets  made  in  Canada  from  Canadian  pig  iron.^  When 
the  tariff  was  altered  in  1894,  the  duty  on  scrap  iron  was 
advanced  to  $3  per  ton  for  one  year,  and  thereafter  to  $4. 
Since  the  duty  on  puddled  bars  was  reduced  from  $9  to  $5, 
a  bounty  of  $2  per  ton  on  puddled  bars  produced  in  Canada 
from  Canadian  pig  was  provided  for.  The  Government 
thus  aimed  at  stimulating  the  pig-iron  industry  and  the 
production  of  puddled  bars  without  greatly  increasing  the 
cost  of  the  raw  material  of  rolling  mills.  The  amount  of 
scrap  iron  imported  promptly  fell  off,  from  569,907  tons  in 

1  Canadian  Engineer,  vol.  i,  p.  308.  ^  Debates,  1888,  p.  498. 

'  Iron  Age,  vol.  liii,  p.  357.  ^  Canadian  Engineer,  vol.  i,  p.  308. 


102    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1893,  to  91,169  tons  in  1897.^  Part  of  this  decrease  was  due 
to  the  depression  of  1893  to  1897,  as  well  as  to  the  increased 
use  of  steel;  yet  the  scrap-iron  duty  undoubtedly  had  some 
efiFect.  Moreover,  the  bounty  on  puddled  bars  seems  to 
have  stimulated  production,  because  in  1895  the  Ontario 
Rolling  Mills  put  in  a  puddling  furnace  with  a  capacity  of 
four  tons  a  day ,2  and  the  Londonderry  Iron  Company  was 
able  to  make  contracts  for  puddled  bars  with  several 
Canadian  bar-iron  manufacturers.^  But  judgment  as  to 
whether  this  change  in  1894  was  a  wise  one  may  be  deferred, 
pending  a  consideration  of  the  history  of  the  industry  and 
the  value  in  general  of  the  protective  policy. 

§  11.  The  iron  duties  were  without  question  a  source  of 
great  difficulty  to  the  party  in  power.  Interests  within  the 
industry  were  easUy  antagonized  by  discrepancies.  The 
duties  on  finished  products  fell  heavily  on  the  consuming 
public;  those  on  secondary  products,  such  as  bar  iron  and 
steel,  were  a  burden  to  the  consuming  manufacturers;  and 
those  on  scrap  iron,  pig  iron,  and  puddled  bars  were 
opposed  by  the  rolling-mill  interests.  The  producers  of  pig 
iron  were  asking  for  increased  protection  on  pig  iron  and 
puddled  bars  and  higher  duties  on  wrought  scrap,  but  it 
was  quite  impossible  to  increase  these  duties  to  the  satis- 
faction of  the  pig-iron  producers.  The  desirability  of  hav- 
ing free  or  cheap  raw  material,  a  natural  corollary  of  the 
national  policy,  was  particularly  applicable  to  the  importa- 
tion of  iron  and  steel.  Yet  the  primary  industry  was  de- 
manding considerable  attention.  Every  one  desired  devel- 
opment, and  political  interests  demanded  assistance.  A 
certain  amount  of  protection  was,  therefore,  accorded, 
especially  in  the  revision  of  1894. 

But  earlier,  as  we  have  seen,   the  bounty  system  was 

^  See  Appendix  G,  Table  II. 

2  Canadian  Mining  Review,  voL  xiv,  p.  11. 

'  Ibid.,  vol.  XV,  p.  105. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM     103 

introduced  as  an  easier  solution  of  the  difficulty.  As  early 
as  1883  direct  and  assured  aid  was  given  in  the  form  of 
bounties  on  Canadian  pig  iron  made  from  Canadian  ore. 
These  obviated  the  necessity  of  a  rearrangement  of  the 
whole  iron  and  steel  schedule.  It  was  argued  that,  as  there 
were  only  three  furnaces  in  operation,  producing  not  more 
than  29,593  tons  out  of  a  consumption  of  81,777  tons  in 
1884,"^  the  production  of  pig  iron  in  Canada  could  not 
supply  the  total  demand  for  several  years.^  The  granting 
of  the  bounty  on  puddled  bars  in  1894  was  intended  to 
offset  the  reduction  of  the  duty  from  $9  to  $5. 

The  Liberal  opposition  objected  to  this  phase  of  the 
national  policy  as  vigorously  as  it  opposed  the  increase  of 
duties  in  1879  and  1887.  It  was  pointed  out  that  local 
feeling  had  prompted  this  bounty  legislation  in  favor  of 
Nova  Scotia  interests,  and  that  bounties  were  extended 
for  the  convenience  of  the  manufacturing  interests.'  The 
Liberal  Party  also  argued  that  to  extend  the  bounty  law 
beyond  the  life  of  one  parliament  was  a  political  injustice.* 
More  important  was  the  objection  that  the  system  in- 
volved a  very  considerable  increase  of  taxation,  while  the 
industry  seemed  to  undergo  but  slight  development  and 
entirely  failed  to  shut  out  imports.  Altogether,  $781,221 .72 
was  paid  out  by  the  Dominion  during  the  years  1883  to 
1897  on  an  output  of  471,060  tons.  In  no  one  year  did  the 
output  exceed  62,522  tons.  Only  three  times  did  it  exceed 
40,000  tons,  and  in  1891  it  fell  as  low  as  20,153  tons.  Im- 
ports of  pig  iron  never  fell  below  28,000  tons,  and  only  four 
times  below  45,000  tons.  In  other  words,  over  haK  of  the 
total  consumption  of  pig  iron  was  imported.^  That  the 
bounty  payments  did  not  increase  so  much  as  was  feared 
by  the  Liberal  Party,  and  that  the  output  increased  even 

1  Canada  Year-Booh,  1908,  p.  519;  see  Appendix  B,  Table  I. 

2  Debates,  1883,  p.  711. 

'  Iron  Age,  vol.  lxx,  September  18,  p.  19. 

*  Debates,  1890,  p.  2828.  ^  See  Appendix  B,  Table  I. 


104    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

less,  is  evidence  that  for  some  reason  the  system  of  bounty 
payments  had  failed  to  realize  all  the  success  hoped  for  it. 

§  12.  There  is  ample  reason,  then,  for  questioning  the 
wisdom  of  protecting  the  various  branches  of  the  iron 
industry  during  the  period  under  consideration.  Already 
a  number  of  counts  stand  against  the  policy.  Contrary  to 
expectation,  the  unfavorable  balance  of  trade  was  not 
wiped  out  by  the  duties  on  iron  and  steel  products,  which 
were  imported  in  very  large  quantities;  prices  were  ad- 
vanced behind  the  wall  of  transportation  charges  and  cus- 
toms duties,  and  if  necessary,  combination  was  resorted  to. 

Even  within  the  industry  there  was  disagreement;  the 
producers  of  primary  products  wanted  protection,  and  the 
producers  of  finished  products  wanted  either  low  duties  on 
their  raw  materials  or  higher  compensatory  duties  or  their 
equivalent  on  the  finished  products.  The  bounty  system 
was  a  political  makeshift,  adopted  and  modified  from  time 
to  time  according  to  the  necessities  of  the  situation.  The 
use  of  specific  duties  deceived  the  public  and  possibly  the 
legislators  themselves.  Uncertainty  regarding  the  system 
was  not  the  least  evil. 

So  much  for  the  standard  objections  to  the  system  — 
objections  that  were  applicable  to  the  Canadian  policy 
prior  to  1897.  But  if  the  system  had  really  developed  a 
large  and  important  industry,  some  or  all  of  these  evils 
might  have  been  forgiven.  Although  it  is  a  common  fallacy 
to  regard  the  wisdom  of  a  protective  policy  as  finally 
proved  if  it  can  be  shown  that  an  extensive  industry  has 
been  thereby  produced,  or,  more  commonly,  if  it  can  be 
proved  that  the  industry  grew  up  during  a  period  of  high 
duties,  rarely  are  the  costs  of  the  system  to  the  taxpaying 
and  consuming  public  given  due  consideration.  Rarely  do 
politicians  or  manufacturers  clamoring  for  protection  con- 
sider the  various  outside  factors  that  may  have  contributed 
to  the  expansion  of  the  industry,  or  the  actual  extent  to 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM     105 

which  the  protective  system  alone  may  have  been  respon- 
sible. 

As  only  two  furnaces  in  Quebec  and  one  in  Nova  Scotia 
existed  in  1879  in  all  Canada,  the  protective  policy  had 
ample  opportunity  to  prove  its  value  by  stimulating  the 
growth  of  the  industry.  To  learn  whether  or  not  it  suc- 
ceeded is  a  partial  purpose  of  the  following  chapter,  devoted 
as  it  is  to  a  consideration  of  the  extent  and  the  causes  of  the 
development  of  the  Canadian  iron  and  steel  industry  from 
1879  to  1897. 


CHAPTER  VI 

THE  DEVELOPMENT  OF  THE  INDUSTRY^ 

§  1.  Of  the  iron  and  steel  plants  still  in  existence  in 
1879,  that  at  Londonderry,  under  the  control  of  a  company 
formed  to  make  a  commercial  test  of  the  Siemens  open- 
hearth  process,  was  by  far  the  most  important.  It  could 
not,  however,  be  called  a  success.  A  large  plant,  including 
ten  furnaces,  had  been  built  at  an  expenditure  of  $1,250,000. 
As  the  Bessemer  process  was  then  the  only  method  ac- 
cepted for  the  production  of  steel  on  a  large  scale,  there  was 
very  little  demand  for  the  large  output  the  works  were  de- 
signed to  produce.^  The  accidental  location  of  the  Acadia 
Iron  Furnace  at  Londonderry  seems  to  have  given  occasion 
for  the  choice  of  a  situation  for  the  plant  of  this  new  com- 
pany, which  was  against  all  successful  working.  Since 
charcoal  was  no  longer  used  as  fuel,  the  woodlands  were  of 
little  use.  Coal,  which  was  never  discovered  on  the  prop- 
erty, had  to  be  brought  twenty-four  miles  from  Springhill, 
or  fifty  miles  from  Pictou.*  At  this  time  only  one  Nova 
Scotia  colliery  mined  suitable  coal,  and  the  owners  had  the 
only  coke  oven  in  the  country;  so  they  supplied  coke  at 
their  own  price.  When,  one  day,  an  explosion  closed  this 
mine,  coke  was  not  to  be  had  at  any  price,  and  the  blast 
furnace  had  to  be  shut  down  with  a  heavy  loss.  After  this 
the  iron  company  built  coke  ovens  of  its  own  and  became 
to  some  extent  independent.  When  finally  a  coal  mine  was 
purchased  and  fully  equipped,  the  coal,  after  many  trials, 
was  found  almost  unfit  for  use.  There  was  a  considerable 
supply  of  ores  and  fluxing  materials,  but  the  ores  were  hard 

^  For  the  geographical  location  of  the  plants  described  see  the  maps  in 
the  Appendix. 

"  Colliery  Guardian,  vol.  lxxxi,  p.  367.  '  Ibid.,  p.  367. 


THE  DE\^LOPMENT  OF  THE  INDUSTRY     107 

and  a  mixture  with  other  quahties  was  almost  a  necessity.^ 
Instead  of  running  a  general  store  from  which  a  consid- 
erable revenue  might  have  been  secured,  the  company 
granted  the  privilege  to  some  outsider  who  took  advantage 
of  his  opportunity  to  overcharge.  It  is  not  surprising,  then, 
that  in  spite  of  the  protective  duties  of  $2  a  ton  and  a 
bounty  of  $1.50  per  ton  on  pig  iron,  the  company  was  in 
liquidation  by  1883,  and  the  plant  was  for  sale  in  1886. 

In  1887,  the  Londonderry  Iron  Company,  which  was 
formed  to  take  over  the  plant,  began  to  turn  out  large 
quantities  of  puddled  bars  and  to  roll  them  into  bar  iron. 
For  a  time  the  "Siemens  "  brand  of  bar  iron  was  recognized 
as  having  high  qualities,  and  it  compared  favorably  with 
the  ordinary  imported  iron.  The  puddled  bars,  too,  were 
of  good,  strong  quality  and  formed  an  excellent  mixture 
with  the  best  grades  of  Scotch  iron,  which  were  more  open 
and  fluid  in  nature. 

Shortly  after  this  scrap  iron  came  into  almost  universal 
use  for  the  manufacture  of  bar  iron  in  Canada,  and  the 
company  was  forced  to  close  the  puddling  furnaces,  until 
1894,  at  which  time  the  duty  on  puddled  bars  was  reduced, 
the  duty  on  scrap  iron  increased,  and  a  bounty  of  $2  per 
ton  on  puddled  bars  given  as  compensation.^  The  produc- 
tion of  pig  iron  continued  to  be  a  source  of  difficulty.  The 
local  supply  of  ore  would  not  keep  more  than  one  furnace 
going;  ores  from  Woodstock,  New  Brunswick,  were  phos- 
phorous and  those  at  Londonderry,  while  practically  pure, 
were  magnetic,  and,  therefore,  hard  to  smelt. ^  Royalty 
claims  on  ore  deposits  in  the  Nictaux-Torbrook  field  were 
secured,  and  in  1891  an  additional  furnace  was  lighted  to 
smelt  these  ores,  which  were  supplied  by  the  Torbrook  Iron 
Company.^ 

^  Canadian  Milling  Review,  vol.  v,  pp.  8-9. 
^  Canadian  Mining  Manual,  1897,  pt.  ii,  p.  74. 

*  Monetary  Times,  vol.  xxrv',  p.  595. 

*  Canadian  Mining  Review,  vol.  xxi,  p.  2. 


108    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

The  company  could  not  compete  in  the  open  market  at 
current  prices  for  pig  iron;  so  it  used  a  large  part  of  its 
product  at  its  own  finishing  plants,  the  pipe,  axle,  and  forge 
foundries,  and  the  rolling  mill.^  In  1890  the  works  were 
partly  rebuilt  and  operated  more  economically  by  a  new 
manager. 2  An  increase  in  protection  in  1894  led  to  the 
building  of  a  new  pipe  foundry.^  Yet,  from  1894  to  1896, 
a  time  of  low  prices,  the  company  was  continually  in  finan- 
cial difficulty.  In  1895  it  had  a  deficit  of  $60,306.  A  tem- 
porary disadvantage,  occasioned  by  the  supply  of  inferior 
fuel,  made  matters  worse.  When  a  dirty  seam  of  coal  had 
been  struck  by  the  Acadia  Coal  Company  which  furnished 
the  coke,  operations  were  retarded  and  the  furnace  more 
or  less  impaired.  Drought  reduced  the  water  supply  and 
caused  frequent  stoppages.  The  product  was  therefore  of 
low  grade.  Moreover,  a  large  stock  of  merchant  iron  on 
hand  represented  an  embarrassing  loss  of  interest,  and  cur- 
rent indebtedness  was  in  excess  of  liquid  assets.  The  com- 
pany had  either  to  dissolve  or  right  itself  by  means  of  some 
internal  rearrangement.*  In  1896  there  was  a  slight  im- 
provement in  conditions,  and  all  departments  were  em- 
ployed to  their  full  capacity.  But  the  prosperity  was  only 
temporary.  The  company  was  soon  hopelessly  embarrassed 
and  unable  to  pay  its  fixed  capital  charges. 

§  2.  Quebec,  too,  maintained  its  reputation  as  an  iron- 
producing  province.  Shortly  after  1875  Mr.  George 
McDougall,  of  Montreal,  leased  the  car-wheel  foundry  at 
Three  Rivers,^  and,  to  supply  the  charcoal  iron  necessary, 
bought  the  St.  Maurice  Forges,  which  he  operated  until 
bounties  were  granted  in  1883.®  Since  the  supply  of  iron 
was  still  insufficient,  he  built  two  charcoal  furnaces  at 

^  Bulletin  of  the  Iron  and  Steel  Association,  vol.  xxm,  p.  268. 

2  Monetary  Times,  vol.  xxrv,  p.  193. 

3  Canadian  Mining  Revie^o,  vol.  viii,  p.  268. 

■*  Iron  Age,  vol.  lvii,  p.  863.  *  Bartlett,  op.  cit.,  p.  519. 

^  Canadian  Mining  Manual,  1897,  pt.  ii,  p.  60. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     109 

Drummondville  as  early  as  1880  and  1881.  Both  furnaces 
produced  charcoal  car-wheel  iron  from  limonite  or  bog 
ores  found  in  the  vicinity.  Wood,  procured  in  the  neigh- 
borhood, was  converted  into  charcoal  at  the  works.  The 
whole  output  of  5000  tons  a  year  was  manufactured  into 
high-grade  car  wheels  at  Three  Rivers  and  Montreal.^ 
These  furnaces,  although  not  of  great  importance,  if  the 
quantity  of  the  product  be  taken  as  an  index,  were  never- 
theless a  valuable  source  of  iron  of  a  special  grade,  and  so 
continued  in  operation  throughout  the  period  in  question. ^ 

Before  1879  the  manufacture  of  iron  at  Radnor  had  been 
gradually  discontinued,  because  the  owners  were  handi- 
capped by  lack  of  shipping  facilities  and  of  capital.  It  also 
seemed  impossible  to  secure  any  large  and  regular  supply  of 
iron  ore;  the  capacity  of  the  furnace  was  hmited  and  the 
operations  irregular.  As  a  result,  it  was  difficult  to  manu- 
facture any  great  quantity  of  the  special  grade  of  iron 
which  was  made  into  car  wheels  at  Lachine,  Quebec,  or  at 
St.  Thomas,  Ontario.^ 

The  Canada  Iron  Furnace  Company  was  formed,  never- 
theless, in  1889  to  acquire  the  properties,  rights,  and  all  ac- 
cessories, which  included  the  forges,  sixty  workmen's  cot- 
tages, a  limestone  quarry,  perfected  water  power,  a  railroad 
line,  bridges  and  sidings,  a  car-wheel  shop  and  shipping 
dock  at  Three  Rivers,  property  for  charcoal  kilns  and 
water  power  at  Grandes  Piles,  Quebec,  the  ore  deposits  at 
Lac  a  la  Tortue,  with  ore  rights  over  100,000  acres  of  bog 
ore-bearing  lands  in  the  St.  Maurice  district."* 

Prospecting  for  an  increased  supply  of  ore  was  com- 
menced and  pushed  for  a  year.  Many  leases  and  purchases 
were  made  in  anticipation  of  future  development.  Since 
the  results  at  the  works  were  good,  and  a  demand  existed 

^  Bartlett,  op.  cit.,  p.  520.  *  Canadian  Engineer,  vol.  in,  p.  263. 

'  P.  Griffin,  "Canada  Iron  Furnace  Company,"  Transactions  of  the 
American  Institute  of  Mining  Engineers,  vol.  xxi,  p.  974. 
*  Canadian  Mining  Review,  vol.  xii,  p.  45. 


110    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

for  the  product,  the  company  decided  to  double  its  output, 
and  after  operating  the  old  stone  stack  for  two  years,  built 
a  new  furnace  in  1892. 

Many  difficulties  had  to  be  overcome.  American  furnace- 
men  could  purchase  raw  material,  such  as  ore  and  charcoal, 
in  the  open  markets,  but  Canadian  companies  had  to  pro- 
vide workmen  for  the  entire  cut  of  wood,  had  to  transport 
the  wood  to  the  charcoal  kilns,  and  the  charcoal  to  the  fur- 
naces, to  mine  the  full  supply  of  ore,  and  quarry  all  the  lime- 
stone.^ The  farmers  who  brought  in  ore  gave  trouble  by  re- 
fusing to  conform  to  the  English  standards  of  weights  and 
measures.^  Nevertheless,  the  nature  of  the  product  was 
such  as  to  make  its  production  profitable.  It  was  consistent 
in  quality  and  well  tested  by  actual  results.  It  was  espe- 
cially valuable  to  foundry-men  because  it  remedied  shrink- 
ing and  produced  true-grained  and  very  strong  castings.  ^ 
With  the  rapid  growth  of  the  transportation  industry  in 
Canada,  the  demand  for  such  a  product  naturally  grew.  In 
fact,  in  1896  the  Canadian  railroads,  with  few  exceptions, 
were  using  car  wheels  made  of  this  iron,  and  the  company 
was  able  to  open  up  foreign  markets  in  the  United  States 
and  Europe.*  Labor  for  securing  ore  and  wood,  supplied  in 
the  slack  seasons  by  the  habitants  of  the  district,  was  cheap 
and  abundant.  Excellent  water  power  for  operating  the  ore 
and  stone  crushers  and  for  pumping  water  was  secured  from 
the  Riviere  au  Lard.  The  abundance  of  wood  suitable  for 
charcoal  was  unquestioned  and  the  bog  ore  deposits  proved 
quite  satisfactory.^  The  company  found  it  practicable  to 
establish  wood  and  ore  deposits  from  which  shipments 
might  be  made  by  rail  to  the  furnace,  seventy-five  to  one 
hundred  miles  away.^  It  is  not  surprising  that,  under  such 
conditions,  the  company  had  considerable  success. 

^  Canadian  Mining  Review,  vol.  xii,  p.  47.  *  Ibid.,  p.  47. 

'  Canadian  Engineer,  vol.  in,  p.  262. 

*  Monetary  Times,  vol.  xxiv,  p.  1302. 

6  Ibid.,  p.  303.  ®  GriflSn,  op.  cil.,  pp.  977-78. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     111 

§  3.  One  rather  unprofitable  and  discouraging  enter- 
prise, one  failure,  and  two  other  small  but  relatively  suc- 
cessful plants  have  been  described.  We  find  in  this  period 
the  first  appearance  of  what  has  since  become  one  of  the 
most  important  of  Canada's  iron  and  steel  plants,  that  at 
Trenton  and  New  Glasgow,  Nova  Scotia. 

Previous  to  1879  a  fairly  prosperous  industry  had  grown 
up  at  Trenton,  Nova  Scotia,  in  the  hands  of  the  Nova 
Scotia  Forge  Company.  Then  wrought  and  scrap  iron  were 
used  as  raw  material.  But  a  change  was  going  on  in  the 
steel  industry,  and  mild  steel  began  to  replace  wrought  iron 
in  the  manufacture  of  car  axles  and  in  general  forge  work. 
This  fact,  together  with  the  difficulty  of  securing  raw  ma- 
terial for  a  rapidly  expanding  trade,  suggested  the  advisa- 
bihty  of  making  steel  from  imported  scrap  steel  and  pig 
iron.  After  a  careful  survey  of  the  situation,  the  manage- 
ment decided  to  embark  on  a  new  enterprise,  and  in  1882 
formed  the  Nova  Scotia  Steel  Company  to  manufacture 
steel  by  the  Siemens-Martin  open-hearth  process.  After  a 
year  of  construction  work  the  first  steel  ingots  were  cast  in 
1883. 

The  original  forge  company  soon  became  a  large  buyer 
of  steel  ingots  and  billets  from  the  new  concern,  which  was 
in  turn  dependent  on  the  forge  for  repairs  and  machine 
work.  Interdependence,  community  of  interest,  and  the 
desirabihty  of  assuring  economy  of  operation  led  to  the 
amalgamation  of  the  two  companies  as  a  joint  enterprise, 
known  as  the  Nova  Scotia  Steel  and  Forge  Company.^ 
After  extensions  had  been  made,  an  excellent  business  was 
carried  on  in  railway  fishplates,  plough  plates,  nail  plate, 
bars  and  angles,  tie  plates,  steel  for  agricultural  imple- 
ments, merchant  steel  in  rounds,  flats,  and  squares,  angles 
and  special  sections,  rivet  steel,  tramway  and  pit  rails.^ 

But  this  system  of  working  imported  pig  iron  and  scrap 

^  Industrial  Canada,  vol.  ii,  p.  328. 
*  Canada  Mining  Review,  vol.  vi,  p.  97. 


112    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

material,  quite  satisfactory  for  a  small  output,  did  not  allow 
of  any  great  expansion.  The  company  thought  it  undesir- 
able to  be  dependent  on  the  local  supply  of  scrap  iron  and 
imports  of  pig  iron,  and  decided  to  manufacture  its  own  pig 
iron  to  make  sure  of  its  raw  material.^  Consequently,  in 
1888,  when  the  iron  ores  of  the  East  River  district,  Pictou 
County,  were  receiving  considerable  attention,  the  preUm- 
inaries  were  instituted  for  building  a  blast  furnace  at  Fer- 
rona,  or  North  New  Glasgow.^  As  the  construction  of  the 
blast  furnaces  would  cost  $500,000,  exclusive  of  mining 
properties  and  operation  of  iron  mines,  and  as  a  section  of 
the  directorate  was  unwilling  to  assume  the  risk  involved 
in  undertaking  so  extensive  a  project,  a  new  company,  the 
New  Glasgow  Coal,  Iron  and  Railway  Company,  was 
formed.  The  company  acquired  sufficient  brown  and  red 
hematite  ores  by  purchase  and  lease  to  warrant  the  estab- 
lishment of  a  modern  blast  furnace  of  large  capacity.^  The 
mines  were  thirteen  miles  from  the  Intercolonial  Railway; 
so  a  railway  was  built  connecting  the  furnace  with  the 
mines  and  limestone  quarry.  The  site  of  the  ironworks  was 
at  Ferrona,  an  admirable  spot  at  the  junction  of  the  two 
railways.  The  contract  for  a  blast  furnace  was  let  and 
work  was  begun  in  1891.  Storehouses,  blacksmith  and 
carpenter  shops,  coal  and  ore  washing  plants,  and  coke 
ovens  were  also  installed.  By  1892  the  company  was  sup- 
plying pig  iron  to  the  Nova  Scotia  Steel  and  Forge  Com- 
pany, and  foundry  iron  to  most  of  the  foundries  in  the 
Province.  The  forge  company  took  more  than  half  of  the 
output.^ 

The  product  was  of  very  good  quality  for  the  manufac- 
ture of  steel,  but  the  manganiferous  character  of  the  ores 
around  New  Glasgow  gave  the  company  some  trouble  in 
the  manufacture  of  foundry  pig  iron.  To  solve  this  diffi- 

1  Industrial  Canada,  vol.  ii,  p.  328.  ^  Debates,  1894,  p.  2346. 

'  Industrial  Canada,  vol.  ii,  p.  328. 

*  Canadian  Mining  Review,  vol.  xii,  p.  115.  • 


THE  DEVELOPMENT  OF  THE  INDUSTRY     113 

culty,  the  company  acquired,  in  1894,  a  large  iron  ore  de- 
posit on  Bell  Island,  in  Conception  Bay,  Newfoundland. 
The  mines  were  opened,  a  double-track  railway  was  built 
to  the  shipping  pier,  and  suitable  mining  machinery  was 
installed.  When  storage  pockets  and  piers  had  been  built, 
by  December,  1895,  ore  was  shipped  to  Ferrona,  and  the 
proportion  of  manganese  was  brought  dowTi  to  a  suitable 
percentage  for  foundry  iron.^  Consequently  an  outlet  was 
found  for  the  other  half  of  the  output. 

The  existence  of  the  steel-works  was  a  very  great  advan- 
tage. The  commimity  of  interest  and  interdependence  of 
the  two  companies  is  a  very  interesting  and  important  fea- 
ture of  the  development  of  the  iron  industry  of  Nova  Scotia. 
The  Nova  Scotia  Steel  and  Forge  Company,  with  its  in- 
creasing demand  for  structural  steel,  was  willing  and  glad 
to  absorb  an  increasing  output  of  pig  iron.^  On  the  other 
hand,  the  more  the  steel  company  expanded,  the  more  the 
blast  furnace  company  prospered.  Thus,  the  New  Glasgow 
Coal,  Iron  and  Railway  Company  weathered  with  relative 
ease  the  depression  and  American  competition  in  the  period 
1 893  to  1 896 .  ^  The  obvious  community  of  interest  suggested 
the  advisability  of  consolidating  the  two  companies.  They 
amalgamated  in  1895  under  the  name  of  the  Nova  Scotia 
Steel  Company.  WTien  the  steel  plant  was  extended,  the 
blast  furnace  was  able  to  operate  more  economically  by 
lengthening  the  runs  in  making  steel  material.* 

Wonderful  progress  had  been  made  in  httle  more  than  a 
decade.  A  small  forge  works  had  expanded  into  a  steel 
plant  using  imported  scrap  and  pig  iron,  and  this  into  a 
fully  rounded-out  iron  and  steel  plant  carrying  on  all  opera- 
tions from  the  mining  of  ore  and  coal  to  the  manufacture  of 
quite  unexcelled  forgings  on  a  relatively  extensive  scale. 

'  Canadian  Mining  Manual,  1897,  pt.  ii,  p.  35. 

*  Canadian  Mining  Renew,  vol.  xi,  p.  35. 

*  Ibid,  vol.  XIV,  p.  4. 

*  Ibid.,  p.  256. 


114    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  4.  All  the  iron  and  steel  plants  of  this  period  men- 
tioned so  far  belonged  to  Quebec  and  Nova  Scotia.  Ontario, 
not  to  be  outdone  in  the  end,  bided  her  time.  For  nearly 
forty-one  years  not  a  blast  furnace  had  been  in  operation  in 
Ontario,  and  during  the  long  interval  the  ore  mines  had 
been  idle  most  of  the  time.  Indeed,  so  httle  interest  was 
felt  that  men  had  ceased  to  look  for  new  deposits  or  to  op- 
erate old  mines.  ^ 

In  the  mean  time  manufacturers  in  Ontario  had  been  de- 
pendent on  outside  supplies  of  pig  iron.  But  in  1893  some 
enterprising  Americans,  endeavoring  to  fix  a  location  for 
smelting-works  in  Ontario,  accepted  Hamilton's  offer  of  a 
free  site,  $40,000  if  the  company  would  expend  $400,000  on 
smelting-works  with  a  capacity  of  150  tons  per  day  before 
December  31,  1894,  and  a  further  bonus  of  $60,000  if  the 
company  would  construct  steel  works  costing  $400,000  by 
December  31,  1896.2  ^he  Hamilton  Blast  Furnace  Com- 
pany, which  was  immediately  formed,  erected  a  casting 
house  in  1894,  but  the  furnace  shell,  after  it  had  been 
partly  built,  was  blown  down,  and  reconstruction  was  for 
the  time  being  stopped  because  the  Grand  Trunk  Railway 
spur  to  the  works  was  not  yet  completed.^  But  a  progres- 
sive community  like  Hamilton  was  not  to  be  robbed  of  its 
new  venture.  The  time  for  building  the  plant  was  ex- 
tended, and  by  July,  1895,  a  blast  furnace  plant  possessing 
all  modern  improvements  to  secure  the  best  economy  of 
fuel  and  handling  of  materials  was  practically  completed.  * 
In  1897  a  steel  plant,  a  spike  factory,  and  puddling  furnaces 
were  added. 

It  had  been  the  intention  of  the  company  to  use  Ontario 
ore  altogether  in  order  to  obtain  the  full  benefit  of  the 
Ontario  and  Dominion  bounties.    But  as   the   lean   ore 

1  Journal  of  the  Iron  and  Steel  Institute,  1897,  no.  Ii,  p.  594. 

2  Iron  Age,  vol.  li,  p.  1292. 

'  Canadian  Mining  Revierc,  vol.  xv,  p.  38. 
*  Monetary  Times,  vol.  xxvi,  p.  610. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     115 

brought  from  North  Hastings  contamed  too  much  sulphur 
and  had  to  be  roasted,  a  large  part  of  the  output  ranked  as 
Number  3  iron.^  A  wider  range  of  ores  was  needed  if  the 
company  was  to  produce  a  grade  of  iron  more  suitable  for 
the  all-round  requirements  of  the  Canadian  trade.^  New 
York  and  other  ores  which  were  tried  were  found  to  be  of 
poor  quality,  inasmuch  as  they  produced  too  much  slag. 
Lake  Superior  ore  was,  therefore,  used  and  though  it  drew 
no  bounty,  the  financial  result  was  satisfactory.  The  pro- 
ject was  a  success  from  the  first.' 

§  5.  Meanwhile  a  number  of  attempts  to  smelt  iron  ore 
in  Ontario  had  proved  unsuccessful.  In  1881  American  in- 
terests began  to  talk  of  smelting  iron  in  the  Ottawa  Valley.'* 
The  Canada  Iron  and  Steel  Company  of  Montreal  was  in- 
corporated to  test  an  invention  for  making  wrought  iron 
direct  from  ore  by  a  "blowpipe  process,"  ^  but  after  experi- 
menting for  a  year,  at  a  cost  of  $70,000,  the  Company 
abandoned  the  scheme. 

In  1882  several  developments  were  considered.  Chicago 
capitahsts  began  to  build  a  blast  furnace  at  Furnace  Falls, 
in  the  county  of  Haliburton,  Ontario.  The  situation  offered 
exceptionally  good  timber  limits,  excellent  water  power, 
proximity  to  flux,  and  railway  connections  with  the  mar- 
ket. But  after  an  expenditure  of  $35,000,  the  work  was 
stopped  for  lack  of  capital  to  complete  the  furnaces.® 

In  Nova  Scotia,  Thomas  Burrows,  intending  to  build  a 
furnace  in  Pictou  County,  bought  a  plot  of  ground  at  St. 

^  Monetary  Times,  vol.  xxvi,  p.  1464. 

*  Iron  Age,  vol.  lvii,  p.  1306. 

^  Monetary  Times,  vol.  xxvi,  p.  146. 

*  Debates,  1882,  p.  7224. 

^  The  iron  ore  was  ground  fine  and  mixed  with  flux,  and  then  intro- 
duced into  a  long  cylindrical  blast  furnace.  The  intense  heat  from  burn- 
ing oil  which  was  used  as  fuel  melted  the  ore.  On  reaching  the  puddling 
chamber,  the  iron  gathered  into  balls,  which,  when  ready,  were  taken  out 
and  hammered  into  blooms. 

8  Bartlett,  op.  cit.,  pp.  522-23. 


116    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Paul's,  and  set  prospectors  and  miners  to  work.  New 
parties  who  entered  the  field  changed  the  course  of  the 
river,  cut  off  the  supply  of  water,  and  ended  the  attempt.^ 

In  1883  the  London  Steelworks  Company  of  London, 
Ontario,  built  works  containing  a  thirty -ton  Siemens  melt- 
ing furnace,  and  a  rolling  mill,  to  make  steel  castings  and  a 
patent  car  wheel,  as  well  as  bar  steel,  steel  flats  and  rounds, 
coil  spring,  and  the  best  quaUties  of  bar  iron.  In  1884  a 
puddling  furnace  and  steam  hammers  were  put  in  to  make 
steel  by  a  new  process;  but,  like  the  earlier  steel  plant  at 
Quebec,  it  was  ahead  of  the  times.  The  company  failed  and 
the  place  was  closed. ^ 

The  Midland  Railway  and  Iron  Company  was  formed  in 
Nova  Scotia  in  1888,  but  after  working  six  months,  it 
stopped  operations  and  nothing  further  was  done.^  In  1889 
Americans  proposed  to  erect  blast  furnaces  to  smelt  ores 
found  north  of  Lindsay,  Ontario,  if  the  local  authorities 
would  give  a  bounty  and  if  the  Government  would  assist 
the  extension  of  the  Irondale  and  Bancroft  Railway,  but 
nothing  further  was  heard  of  the  suggestion.*  In  the  same 
year  the  Nova  Scotia  Coal,  Iron  and  Railway  Company 
was  formed  to  develop  the  mines  in  Pictou  County,  Nova 
Scotia.  Analyses  were  laid  before  British  and  American 
capitalists,  but  wnthout  success;  they  were  afraid  to  invest 
in  the  Canadian  iron  industry.^  In  1892  capitalists,  includ- 
ing Charles  Rogers,  Robert  Jaffray,  and  G.  A.  Cox,  were 
organizing  a  company  to  build  a  blast  furnace  at  Toronto. 
But  when  they  could  not  secure  an  alteration  of  the  bounty 
system  to  include  iron  made  from  all  ores,  the  proposal  was 
abandoned.®  In  1895  there  was  talk  of  an  iron  and  steel 
plant  to  manufacture  pig  iron  and  steel  and  finished  ar- 
ticles in  Kingston,  which  was  asked  to  provide  a  site  and 

^  Canadian  Engineer,  vol.  ii,  p.  104.  ^  Bartlett,  op.  cit.,  p.  535. 

'  Canadian  Engineer,  vol.  ii,  p.  105. 

*  Monetary  Times,  vol.  xxiii,  p.  465. 

'  Canadian  Engineer,  vol.  ii,  p.  104.  ®  Iron  Age,  vol.  ii,  p.  1080. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     117 

a  loan  of  $250,000,  secured  by  a  mortgage  on  the  stock, 
plant,  and  prospective  bounties,  but  the  whole  affair  fell 
through.^ 

There  was  to  be  one  more  attempt  to  estabhsh  a  second 
iron  plant  in  Pictou  County,  Nova  Scotia.  In  1890,  Mr. 
M.  E.  Sjostedt  headed  a  prospecting  company  to  ascertain 
whether  a  charcoal  iron  furnace  could  be  suitably  located 
in  Nova  Scotia.  They  chose  to  make  charcoal  iron  because 
of  the  demand  for  car-wheel  manufacture,  at  a  time  of  ex- 
tensive railway  construction. ^  In  1891  the  Pictou  Charcoal 
Iron  Company  was  formed  to  acquire  several  deposits  of 
excellent  brown  hematite  on  the  line  of  a  new  branch  rail- 
way from  Bridge ville  to  the  Intercolonial  Railway.  Large 
tracts  of  timberland  were  also  acquired.  At  last  the  com- 
pany decided  to  build  a  blast  furnace  at  Bridgeville  in  close 
proximity  to  the  ore  and  limestone  beds.  This  situation 
afforded  the  advantage  of  a  short  haul  of  ore  and  fluxes  to 
the  furnace,  large  tracts  of  hardwood  in  the  immediate 
vicinity  and  along  the  Intercolonial  and  the  Nova  Scotia 
Midland  Railways,  and  the  two  railways  gave  ample  out- 
let for  the  product.  The  foundation  of  a  furnace  was  laid  in 
the  winter  of  1891,  but  unexpected  difficulty  in  securing 
funds  for  the  enterprise  retarded  progress,  and  the  works 
were  not  built  until  1892,  when  a  second-hand  furnace  and 
machinery  were  installed,  and  the  manufacture  of  charcoal 
iron  was  begun.'  The  bounty  on  puddled  bars  resulted  in 
the  addition  of  a  puddling  plant  in  1894.^  In  1895  the  com- 
pany instituted  a  steel  converting  plant  to  turn  the  larger 
part  of  their  material  into  high  quality  agricultural  imple- 
ment steel  for  the  home  market.^  Lack  of  orders  for  char- 
coal pig  iron,  lack  of  capital,  and  dullness  of  trade  ended 
the  active  work  of  the  company  in  1896,  mining  operations 

^  Canadian  Mining  Review,  vol.  xiv,  p.  95. 

2  Ibid.,  vol.  XII,  p.  30.  »  Ibid.,  pp.  2-3. 

*  Canadian  Mining  Manual,  1897,  pt.  ii,  p.  79. 

6  Canadian  Engineer,  vol.  iii,  p.  263. 


118    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

alone  being  carried  on  for  a  short  time  to  supply  the  Nova 
Scotia  Steel  Company.^ 

§  6.  Meanwhile,  the  Canadian  rolling  mill  and  finishing 
industry  had  experienced  considerable  development.  In  1880 
the  Morrow  Machine  Screw  Company  of  Ingersoll,  and  the 
St.  John  Bolt  and  Nut  Company  of  New  Brunswick,^  were 
formed.  In  1881  F.  D.  Bigelow  built  a  nail  factory,  which 
was  taken  over  by  the  Pillow  and  Hersey  Company  in  1887.^ 
In  1883  the  Metropolitan  Rolling  Mills  were  incorporated 
and  a  plant  built  in  Montreal,*  In  the  same  year  the  Mon- 
treal Steelworks  were  opened;  and  shortly  after  the  Do- 
minion Bridge  Company  and  the  Dominion  Wire  Rope 
Company  were  incorporated.^ 

The  Coldbrook  Rolling  Mills  of  St.  John,  New  Bruns- 
wick, which  had  not  been  in  operation  for  some  years,  were 
bought  in  1884  by  Messrs.  Burpee  and  put  in  operation.® 
In  1885  the  Halifax  Rolling  Mill  Company  built  in  Halifax,^ 
and  Messrs.  J.  and  W.  Chesley  built  a  rolUng  mill  in  St. 
John.  In  1888,  the  Montreal  RolHng  Mills  added  bar  and 
plate  mills  to  the  plant  as  well  as  a  wrought-iron  pipe  plant. 
The  Canadian  Pacific  Railway  was  making  all  its  own  loco- 
motives; a  screw,  carriage  bolt,  and  nail  factory  was  built, 
and  a  pipe  foundry  and  bridge  works  were  built  at  Hamil- 
ton; ^  the  Montreal  Car  Wheel  Company  was  incorporated 
by  the  Drummond  interests;^  and  the  Ontario  Rolling 
Mills  Company  built  a  new  plant  at  Swansea.^"  In  1889  the 
Montreal  Steel  works  were  incorporated  by  K.  W.  Black- 
well  and  J.  R.  Wilson  as  the  Canada  Switch  Manufactur- 
ing Company. ^^  The  Portland  Rolling  Mills  added  to  their 

^  Canadian  Mining  Review,  vol.  xv,  p.  219. 
2  Canadian  Mining  Manual,  1895,  p.  276. 
»  Ibid.,  p.  253.  *  Ibid.,  1893,  p.  251. 

s  Ibid.,  1895,  p.  258.  ^  Bartlett,  op.  cit.,  p.  536. 

7  Ibid.,  p.  542.  8  Debates,  1888,  p.  1036. , 

^  Canadian  Mining  Manual,  1895,  p.  274. 
"  Ibid.,  p.  252.  "  Ibid.,  p.  275. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     119 

plant  a  puddling  furnace,  five  heating  furnaces,  three  trains 
of  rolls,  two  spike  machines,  and  a  fifteen-ton  hammer.^ 
The  Ontario  Lead  and  Barb  Wire  Company  bought  the 
plant  of  the  Hamilton  Steel  Wire  Nail  Company  and  re- 
moved it  to  Toronto,  where  an  extended  plant  was  con- 
structed. ^  The  Belleville  RolUng  Mills  Company  was 
formed  to  roll,  manufacture,  and  sell  iron  and  steel  and 
their  products.^  In  1890  the  Drummond-McCall  Pipe 
Foundry  was  incorporated,*  and  the  Caledonia  Ironworks 
for  manufacturing  engines  and  boilers  was  put  on  its  feet  by 
J.  McDougall  &  Company  at  Montreal.^ 

In  1893  J.  Rhodes  Curry  &  Company  bought  the  car- 
wheel  foundry  and  machine  shop  of  J.  Harris  &  Company, 
St.  John,  and  turned  out  the  first  Canadian  cars  at  Amherst, 
Nova  Scotia.^  The  McDonell  Rolling  Mills  Company  built 
works  at  Surmyside,''  In  1894  the  Ontario  Rolling  Mills 
Company,  encouraged  by  the  increased  duty  on  scrap  iron, 
put  in  a  four-ton  puddling  furnace.^  In  the  same  year  the 
Gananoque  Nut  Factory  was  put  in  operation.^  The  chief 
products  of  these  rolling  mills  were  merchant  and  other  bar 
iron,  nail  plate,  mine  rails,  ship  and  railway  spikes,  bridge 
bolts,  car  axles,  fishplates  and  knees  for  ships,  cut  nails, 
horseshoes,  horseshoe  nails,  bolts  and  nuts,  band  iron,  steel 
forgings,  rivets,  and  washers.  ^°  This  history  of  the  finishing 
industries  does  not  cover  the  full  number  as  a  considera- 
tion of  the  census  figures  for  1881  and  1891  will  show.^^  In 

^  Canadian  Mining  Manual,  1895,  p.  275. 

2  Monetary  Times,  vol.  xxiii,  p.  248.  ^  Ibid.,  p.  778. 

*  Canadian  Mining  Review,  vol.  x,  pp.  45-46. 

^  Canadian  Engineer,  vol.  ii,  p.  80. 

6  Iron  Age,  vol.  m,  1893,  p.  27. 

^  Canadian  Mining  Manual,  1895,  p.  251. 

^  Iron  Age,  vol.  lvi,  p.  25. 

8  Debates,  1894,  p.  2537.  i"  Iron  Age,  vol.  Lin,  p.  460. 

1^  See  Appendix  C,  Table  I.  As  the  figures  for  1901  cover  establish- 
ments employing  five  employees  or  more,  and  as  there  was  probably  little 
advance  between  1891  and  1897  owing  to  the  industrial  depression,  the 
figures  for  1901  are  of  little  value.  The  figures  for  1881  and  1891  give 
fairly  satisfactory  indication  of  the  growth  down  to  1897. 


120    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1881  there  were  twenty-six,  and  in  1891,  twenty-nine  es- 
tablishments producing  a  restricted  number  of  iron  and 
steel  products,  chiefly  rolling-mill  products,  nuts,  bolts, 
nails,  hinges,  and  kindred  articles.  Between  1881  and  1891 
six  bridge-building  plants  were  established,  and  the  number 
of  wire  and  wire-fencing  plants  was  increased  from  seven 
to  fifty.  Railway  supplies  received  the  attention  of  three 
plants  in  1891,  as  compared  with  a  single  plant  in  1881. 
The  figures  showing  the  values  of  the  products  give  even 
more  adequate  evidence  of  the  advance  in  the  production 
of  finished  iron  and  steel  products.  It  was  generally  felt  in 
1893  and  1894  that  the  capacity  of  existing  Canadian  mills 
was  more  than  ample  to  supply  the  domestic  demand 
for  most  rolling-mill  products.^  Competition,  in  fact,  was 
so  severe  that  amalgamation  and  combination  became  nec- 
essary. 

§  7.  It  is  evident  that,  during  the  period  1874  to  1897, 
forces  were  working  to  develop  an  iron  and  steel  industry. 
By  1897  the  primary  industry  had  begun  to  assume  a  prom- 
ising importance.  Success  had  attended  the  operations  at 
Radnor  and  at  Drummondville,  Quebec.  The  annual  out- 
put had  advanced  from  an  average  of  about  25,000  tons 
for  the  early  eighties  to  an  average  of  45,294  tons  for  the 
years  1893  to  1897.  The  production  of  both  pig  iron  and 
steel  had  begun  at  New  Glasgow  and  Trenton  in  Nova 
Scotia,  with  very  satisfactory  results,  and  at  Hamilton, 
Ontario,  a  beginning  had  been  made  in  the  development  of 
what  has  since  become  an  important  iron  and  steel  indus- 
try. Furnaces  existed  also  at  Londonderry,  and  at  Bridge- 
ville.  Nova  Scotia,  although  the  results  of  their  operations 
were  not  at  all  encouraging.  The  rolling-mill  and  finishing 
industry  was  so  widely  developed  in  Ontario,  Quebec,  and 
the  Maritime  Provinces,  that  a  redundant  supply  of  certain 
kinds  of  plants  seems  actually  to  have  existed. 
1  Iron  Age,  vol.  liii,  p.  460. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     121 

This  development  of  the  Canadian  iron  and  steel  indus- 
try demands  some  explanation,  and  explanations  are  not 
difficult  to  find.  At  Radnor  and  at  Drummond\'ille,  the 
character  of  the  ore  and  the  consequent  quality  of  the  iron 
assured  a  ready  market  for  the  product.  When  this  iron 
could  find  a  market  in  England  and  the  United  States  the 
conditions  of  production  must  have  been  very  favorable. 
Likewise,  the  developments  at  New  Glasgow  and  Trenton 
were  favored  by  the  discovery  and  use  of  the  Newfound- 
land ores  as  early  as  1894.  It  is  doubtful  whether  the  pro- 
duction of  pig  iron  at  Trenton  would  have  succeeded  had 
it  not  been  for  the  Newfoundland  ores,  since  the  Pictou 
ores  were  soon  found  to  be  unsatisfactory  and  their  supply 
was  limited.  Developments  at  Hamilton,  Ontario,  were 
similar.  While  the  company  originally  intended  to  use 
Ontario  ores  in  order  to  benefit  by  the  Ontario  bounty 
system,  it  was  found  necessary  to  use  Lake  Superior  ores 
which  could  be  laid  down  at  Hamilton  almost  as  cheaply  as 
at  American  furnaces.  On  the  other  hand,  the  depletion  of 
ore  deposits  at  St.  Maurice,  and  the  hardness  of  the  ores  at 
Londonderry,  were  conditions  that  ended  the  operations  of 
the  St.  Maurice  Forges  and  made  the  production  of  pig 
iron  at  Londonderry  barely  profitable.  Thus  we  see  that  in 
this  period  of  the  history  of  the  industry,  the  supplies  of 
ore  were  at  some  points  more  favorable  than  they  had 
been. 

The  fuel  supply  was  also  a  matter  of  importance.  Fuel 
could  be  laid  down  at  Hamilton  almost  as  cheaply  as  at 
American  Lake  ports,  and  at  New  Glasgow  there  was  a 
fairly  satisfactory  supply  of  good  coking  coal.  Charcoal 
was  abundant  at  Radnor  after  depots  were  arranged  for 
the  accumulation  of  both  ore  and  charcoal.  At  Drum- 
mondville  there  was  plenty  of  good  wood  for  charcoal. 
Elsewhere  conditions  were  not  so  favorable.  The  London- 
derry firm  had  to  shut  down  on  one  occasion  when  the  only 
coke  plant  in  Nova  Scotia  failed  to  send  a  supply.  Finally, 


122    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

it  had  to  build  its  own  coke  ovens.  The  end  of  operations 
at  St.  Maurice  was  also  hastened  by  the  lack  of  an  adequate 
supply  of  charcoal. 

Meanwhile,  too,  the  market  for  pig  iron  and  steel  billets 
had  grown.  The  Canadian  consumption  of  pig  iron  ad- 
vanced, from  an  average  of  75,000  tons  for  the  years  1880 
to  1885,  to  an  average  annual  consumption  of  106,555  tons 
for  the  years  1890  to  1895.^  This  was  not  so  large  as  it 
might  have  been  had  the  rolling  mills  not  made  consider- 
able use  of  scrap  iron  in  the  production  of  bars  and  finished 
products.  The  consumption  of  much  pig  iron  at  Hamilton 
and  within  a  radius  of  one  hundred  miles  suggested  the 
initial  attempts  of  the  Hamilton  Blast  Furnace  Company. 
The  company  also  used  a  great  deal  of  iron  in  its  own  mills. 
While  the  ordinary  product  of  the  Pictou  Charcoal  Iron 
Furnace  failed  to  secure  a  favorable  reception,  the  special 
quality  of  charcoal  iron  produced  at  Radnor  and  at  Drum- 
mondville  was  always  in  demand  for  the  manufacture  of 
car  wheels  in  this  period  of  rapid  railway  expansion.  Not 
only  was  the  integration  of  the  different  branches  of  the 
New  Glasgow  industries  a  source  of  special  strength,  by 
making  them  almost  self-sufficing,  but  their  highly  finished 
products  found  a  ready  market.  The  Londonderry  plant 
found  advantage  in  extending  its  finishing  industries  to  in- 
sure an  outlet  for  its  primary  products  which  did  not  have 
as  good  an  open  market.  The  integration  of  the  various 
plants  of  the  McDougalls  and  the  Drummonds,  of  Mon- 
treal, rendered  these  enterprises  more  complete  than  they 
would  otherwise  have  been,  and  put  them  on  a  better  plane 
of  competition.  While  one  branch  of  the  industry  supphed 
pig  iron,  another  finished  the  raw  material  into  articles 
ready  for  an  extensive  and  growing  market. 

By  1877  steel  had  begun  to  take  the  place  of  puddled 
bars  in  the  manufacture  of  finished  products.  The  total 
world  product  advanced  from  569,618  tons  in  1877  to 
1  See  Appendix  B,  Table  I. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     123 

7,155,957  tons  in  1897.^  Unquestionably,  this  had  much  to 
do  with  the  construction  of  steel  mills,  and  the  practical 
abandonment  of  puddling  furnaces. 

The  supply  or  lack  of  capital  often  spelled  success  or  fail- 
ure in  the  Canadian  iron  and  steel  industry.  At  this  time 
more  domestic  capital  had  been  accumulated  and  was  avail- 
able for  investment.  Probably  the  development  of  the  cor- 
porate form  of  business  organization  was  also  significant. 
At  all  events,  one  of  the  most  noticeable  facts  was  that 
plants  previously  owned  and  operated  by  partnerships 
were  in  the  later  eighties  taken  over  by  joint-stock  com- 
panies, and  whenever  new  hues  of  development  at  New 
Glasgow  were  entered  upon,  a  new  company  was  formed, 
even  though  the  interests  were  usually  so  nearly  identical 
that  an  amalgamation  was  formed  as  soon  as  the  new  en- 
terprise had  proved  its  worth.  In  many  cases  new  capital 
was  subscribed  and  extensions  were  made  to  the  plant 
whenever  incorporation  was  effected.  Fresh  ventures  al- 
most always  made  use  of  the  corporate  form  of  organi- 
zation. 

As  we  have  seen,  the  most  rapid  growth  of  the  industry 
was  reahzed  in  the  finishing  stages.  This  can  be  at  least 
partially  explained  by  the  increase  of  railway  mileage 
from  6858  miles  in  1879,  to  10,773  miles  in  1885,  and  to 
16,550  miles  in  1897.^  The  facility  wdth  which  corporations 
could  be  formed  doubtless  aided  the  growth  of  the  finishing 
industry.  The  most  significant  fact,  however,  seems  to  be 
that  this  branch  of  the  industry  could  be  conducted  on  a 
relatively  small  scale,  in  small  local  factories,  to  supply  a 
local  market  with  commodities  on  which  transportation 
charges  might  be  high.  A  small  building  could  be  turned 
into  a  nail  factory,  or  rolHng-mill  proprietors  could  add  a 
department  for  the  production  of  horseshoes  or  tacks.  It  is 
for  this  reason  largely  that  a  considerable  addition  to  the 

^  W.  Harper,  Charts  of  the  Commerce  of  the  World,  p.  83. 
^  See  Appendix  A. 


124    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

number  of  rolling  mills  may  be  noted  for  the  years  of  pros- 
perity 1880  to  1883  and  1887  to  1890. 

§  8.  It  is  more  difficult  to  determine  the  exact  effect  of 
the  tariff  and  bounty  system  on  the  development  of  the 
iron  and  steel  industry,  during  this  period,  than  it  was  to 
determine  the  value  of  protection  in  the  previous  period. 
Discussion,  of  which  there  was  much  more  than  during  the 
earlier  period,  shows  that  opinion  as  to  the  effects  of  pro- 
tection varied.  Yet  most  of  those  who  favored  protection 
were  usually  content  with  proving  that  the  industry  had 
grown  up  during  a  period  of  high  duties.  As  we  have  seen, 
such  an  argument  is  not  conclusive.  Those  who  wanted  pro- 
tection should  have  been  able  to  prove  the  connection  be- 
tween protection  and  the  development  of  the  industry  and 
should  have  been  able  to  show  that  the  benefits  did  not  ex- 
ceed the  burden  of  the  protective  policy. 

Evidence  of  the  stimulus  afforded  by  protection  appears, 
however,  in  several  cases.  The  Annapolis  Iron  Company 
put  its  furnaces  in  operation  at  Londonderry,  following  the 
granting  of  bounties  on  puddled  bars  and  the  increase  of 
the  duties  on  scrap  iron.  The  Hamilton  Blast  Furnace 
Company  was,  no  doubt,  encouraged  by  the  generosity  of 
Hamilton  and  by  the  bounty  law  and  the  scrap  iron  duty 
of  1894.  Protection  seems  to  have  been  most  effective  in 
developing  the  finishing  industry.  In  fact,  the  protection 
afforded  was  so  high  that  the  production  of  some  lines  was 
overstimulated  to  an  extent  necessitating  the  formation  of 
combines  to  maintain  prices  behind  the  tariff  wall.  The 
growth  of  the  finishing  industry  was  partly  due  to  causes 
other  than  protection.  Yet  protection,  by  increasing  prices, 
encouraged  the  erection  of  small  plants.  At  the  same  time 
the  fact  that  pig  iron  and  especially  scrap  iron  could  be 
secured  cheaply  within  the  country  or  could  be  imported  at 
low  prices  favored  the  growth  of  the  rolling-mill  industry 
by  providing  cheap  raw  materials. 


THE  DEVELOPJlIENT  OF  THE  INDUSTRY     125 

In  most  cases,  however,  protection  had  httle  to  do  w-ith 
the  development  of  the  primary  industry.  The  St.  ISIaurice 
Forges  failed  in  1883,  the  year  that  bounties  were  granted 
the  "struggling  industry."  The  Steel  Company  of  Canada 
was  in  hquidation  soon  after  the  first  increase  in  protection. 
Likewise  the  bounties  on  puddled  bars  and  the  duty  on 
scrap  iron  entirely  failed  to  support  the  Pictou  Charcoal 
Iron  Company.  The  Hamilton  Blast  Furnace  Company 
succeeded  without  the  use  of  the  bounties  it  had  expected 
on  the  production  of  iron  from  Ontario  ores.  The  produc- 
tion of  steel  began  in  1882,  long  before  bounties  were 
given,  and  was  continued  with  success  despite  the  fact  that 
the  duty  of  $3  per  ton,  provided  for  in  1879,  was  abohshed 
in  1881.  New  pig-iron  furnaces  were  built  at  Radnor  and 
at  New  Glasgow  five  years  after  the  revision  of  1887  and 
before  the  scrap-iron  duty  was  raised  in  189-1!.  The  Drum- 
mondville  furnaces  were  built  in  1880  and  1881  before 
bounties  were  added  to  the  duty  of  $2  per  ton.  As  there 
was  a  foreign  market  for  the  product  of  the  car-wheel 
plant,  these  furnaces  would  have  been  built  whether  or  not 
protection  had  increased  in  1879.  In  short,  practically  all 
the  successful  pig-iron  and  steel  plants  were  started  be- 
cause of  fundamental  technical  conditions  that  favored 
their  development  rather  than  because  of  the  application 
of  the  national  pohcy  of  protection  to  the  iron  and  steel 
industry. 

Ha\ang  determined  the  part  played  by  protection  in  the 
development,  we  may  turn  our  attention  to  the  wisdom  of 
the  policy.  In  the  first  place,  neither  the  duties  nor  boun- 
ties were  responsible  for  any  great  part  of  the  growth  of 
the  primary  industry.  In  the  mean  time  the  duties  on  pig 
iron  must  have  cost  consumers  about  $3,000,000  on  a  total 
consumption  of  1,500,000  tons.  Of  this,  the  home  produc- 
ers must  have  received  about  $1,000,000,  enough  to  build 
a  very  respectable  blast  furnace  capable  of  producing  the 
total  amount  of  pig  iron  imported.   This  $1,000,000,  plus 


126    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  additional  $3,000,000  paid  by  consumers,  and  over 
$600,000  paid  as  bounties,  could  have  been  used  in  a  more 
remunerative  way,  possibly  by  the  Government  itself,  in 
building  its  own  furnaces  and  mills  for  the  production  of 
iron  for  government  railways  and  other  government  works. 
The  protection  of  the  primary  industry  was,  therefore,  a 
mistake. 

It  seems  strange  that  the  duties  on  pig  iron  and  scrap 
iron  were  not  entirely  abolished  in  favor  of  bounties  on  pig 
iron  alone.  The  payment  of  bounties  of  $4  per  ton  would 
have  cost  the  Government  only  $1,200,000,  and  would 
have  cost  consumers  practically  nothing.  However,  politi- 
cal parties,  like  electorates,  have  the  liberty  of  making 
errors  in  judgment:  it  is  easier  to  see  a  mistake  thirty 
years  later  with  the  figures  before  us  than  to  foresee  and 
avoid  it.  But  by  1893  the  Liberal  Party  saw  the  force  of 
this  argument  in  tariff  pohcy,  and  shaped  its  poUtical  plat- 
form accordingly. 

At  the  same  time  a  good  deal  can  be  said  for  the  applica- 
tion of  protection  to  the  finishing  industry.  As  we  have 
seen,  protection  undoubtedly  had  a  stimulating  effect. 
Whether  the  cost  was  too  great  or  not  is  difficult  to  deter- 
mine. Certainly  large  volumes  of  iron  and  steel  goods 
were  imported  under  the  duties.  In  the  case  of  some  prod- 
ucts competition  became  so  severe  that  prices  fell,  and  for 
the  time  being  the  duties  were  not  so  great  a  burden  on  con- 
sumers as  they  might  have  been.  Once  the  industry  was 
developed,  protection  should  have  practically  been  abol- 
ished; the  revision  of  1894  did  effect  some  slight  reduction 
on  finished  iron  goods.  The  growth  of  the  finishing  industry 
would  have  warranted  more  extensive  reductions  than  were 
made  at  that  time.  Many  manufacturers  and  others  using 
iron  and  steel  goods  were  of  this  opinion,  and  accord- 
ingly gave  their  approval  to  the  policy  of  "tariff  for  rev- 
enue only  "  launched  by  the  Liberals  at  the  Ottawa  Con- 
vention of  1893. 


THE  DEVELOPMENT  OF  THE  INDUSTRY     127 

§  9.  In  conclusion,  it  may  be  said  that,  while  there  was 
some  advance  in  the  Canadian  iron  and  steel  industry  be- 
tween 1879  and  1897,  the  industry  was  not  a  large  one.  As 
protection  apparently  was  not  an  important  factor  in  the 
development  of  the  primary  industry,  the  burdens  of  pro- 
tection lead  us  to  believe  that  it  was  a  mistake.  Protection 
did  have  a  considerable  influence  in  developing  the  produc- 
tion of  finished  products,  but  it  was  not  reduced  as  rapidly 
as  it  should  have  been,  and  injustices  and  inequalities  in 
the  customs  tariff  led  to  much  criticism  and  opposition.  So 
when  the  Conservative  Party  lost  power  in  1896,  Canada 
entered  on  a  new  period  of  commercial  policy  and  of  eco- 
nomic history  which  will  be  the  subject  for  discussion  in 
Part  Four  of  this  study. 


PART  FOUR 

THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 
1897-1914 


CHAPTER  VII 

THE    GENERAL   HISTORY    OF    THE    TARIFF   AND 
BOUNTY    SYSTEM 

§  1.  Nine  years  after  the  advance  in  customs  duties  in 
1887,  the  protective  policy  was  again  the  subject  of  sharp 
controversy,  and  the  political  situation  was  acute.  The 
Liberal  programme,  of  "tariff  for  revenue  only,"  included 
not  only  a  reduction  of  duties  on  iron  and  steel,  but  also 
the  abolition  of  the  bounty  system.  At  the  same  time 
much  dissatisfaction  with  and  criticism  of  the  Conserva- 
tive Government  was  abroad.  The  period  from  1893  to 
1897  was  one  of  severe  industrial  depression  and  of  gen- 
eral discontent.  The  country  sought  relief  at  the  hands  of 
a  new  Government,  and  in  1896,  placed  the  control  in  the 
hands  of  the  Liberal  Party. 

By  far  the  most  difficult  task  for  the  revisers  of  the 
tariff  in  1897  was  the  alteration  of  the  schedule  compris- 
ing iron  and  steel  and  the  leading  intermediate  and  finished 
products.  It  is  always  difficult  to  frame  an  iron  and  steel 
schedule  that  will  suit  all  parties  for  any  length  of  time; 
even  within  the  industry,  dissension  is  sure  to  arise.  Prob- 
ably no  other  schedule  of  Canadian  duties  has  given  occa- 
sion for  so  much  discussion  among  manufacturers  or  so 
much  difficulty  in  politics. 

The  farmers  especially  expected  to  have  a  great  burden 
lifted  from  their  shoulders.  They  expected  to  get  many 
iron  and  steel  articles  at  prices  materially  lower  as  a  result 
of  the  reduction  of  the  duties  which  had  protected  the  suc- 
cessive stages  of  manufacture.  On  the  other  hand,  the  pro- 
ducers of  pig  iron,  steel  billets,  and  puddled  bars  wanted 
high  protective  duties  continued  along  with  the  bounties. 


132    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

While  the  foundrymen  were  not  quite  so  united,  most  of 
them  favored  a  reduction  of  duties  on  their  raw  materials. 
Manufacturers  who  used  castings  as  raw  material  were 
quite  decided  in  their  demand  that  there  should  be  a  re- 
duction of  protection  to  producers  of  castings.  The  manu- 
facturers of  bar  iron,  who  were  complaining  of  the  duty  on 
pig  iron,  puddled  bars,  and  on  wrought  scrap  iron,  were 
specially  grieved  by  the  advance  of  duties  on  scrap  iron 
in  1894.  Likewise,  the  manufacturers  who  used  bar  iron 
and  steel  in  the  production  of  finished  articles  objected  to 
the  high  duties  on  their  raw  materials.  Each  stage  of  the 
industry  was  quite  willing  to  accept  protection  for  itself, 
insisting  at  the  same  time  on  cheap  raw  materials  for  the 
production  of  its  own  output.  It  is  probable  that  the  gen- 
eral dissatisfaction  on  the  question  of  iron  and  steel  duties 
secured  for  the  Liberals  the  support  not  only  of  the  farm- 
ing element,  but  in  even  greater  degree  of  the  great  body 
of  manufacturers  themselves,  to  whom  the  prospect  of  de- 
creased duties  on  articles  which  formed  their  raw  mate- 
rials appealed  as  an  obvious  desideratum,  and  contributed 
more  than  any  other  factor  to  the  defeat  of  the  Conserva- 
tives m  1896. 

§  2,  So  far  as  the  iron  and  steel  duties  were  concerned, 
the  tariff  of  1897  provided  a  general  reduction.^  On  pig 
iron,  kentledge,  and  cast  scrap  iron,  a  reduction  of  $1.50 
was  made  and  the  duty  placed  at  $2.50  per  ton.  The  duty 
on  iron  and  steel  ingots,  cogged  ingots,  blooms,  slabs,  bil- 
lets, puddled  bars,  loops,  etc.,  n.o.p.  (not  otherwise  pro- 
vided for),  was  reduced  from  $5  to  $2  per  ton.  Iron  and 
steel  scrap  were  admitted  at  $1.50  instead  of  $3  per  ton; 
the  duties  on  steel  bars,  bands,  plates,  and  steel  angles 
were  reduced  from  $10  to  $7;  on  steel  fish-  and  tie-plates 
from  $10  to  $8;  and  the  duties  on  steel  shaftings  and  forg- 
ings  were  placed  at  30  per  cent,  with  a  minimum  of  $10 
^  See  Appendix  F. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    133 

per  ton,  instead  of  35  per  cent,  with  a  minimum  of  $15  per 
ton.  On  plates  not  less  than  one  quarter  of  an  inch  thick, 
tubing  for  boilers,  angle  ties,  beams,  etc.,  over  35  pounds 
per  lineal  yard,  the  reduction  was  2|  per  cent.  The  duty 
of  30  per  cent  on  iron  and  steel  bars  and  rails  was  reduced 
by  applying  it  to  all  rails  weighing  as  much  as  45  pounds, 
instead  of  35  pounds  per  yard.  The  duty  on  bituminous 
coal  was  reduced  from  60  cents  to  20  cents  per  ton  on  slack 
coal,  and  to  53  cents  on  "run -of -mine"  coal.  Iron  and 
steel  for  certain  uses  —  for  instance,  iron  and  steel  masts, 
beams  for  composite  ships,  iron  and  steel  products  whick 
at  the  time  of  importation  were  of  a  kind  not  made  in 
Canada  and  were  imported  for  use  on  ships;  steel  rails 
weighing  not  less  than  45  pounds  per  yard  for  use  on  pub- 
lic railways,  but  not  including  electric  railways  or  tram- 
ways —  were  entered  free.  Many  other  forms  of  iron  and 
steel  of  special  grades,  sizes,  and  characteristics  were  en- 
tered free  when  used  for  special  purposes.  Wire  rods  were 
also  admitted  free  of  duty.^  On  the  primary  products  in 
general,  the  reduction  varied  from  35  to  75  per  cent  of  the 
previous  duty;  on  the  more  finished  products  it  averaged 
about  2|  per  cent,  or  about  12  to  20  per  cent  of  the  previous 
duty.  This  revision  of  1897  was  framed  on  the  principle  of 
making  as  many  concessions  as  possible  to  every  one.  For 
instance,  since  puddled  bars  were  not  extensively  pro- 
duced, the  duty  was  reduced.^  The  duty  on  bridge  plates 
was  reduced  on  the  general  principle  of  making  iron  and 
steel  products,  especially  raw  materials,  cheaper.^  Barbed 
wire  and  galvanized  fencing  were  placed  on  the  free  list 
January  1, 1897,*  as  a  concession  to  the  farmers.  The  labor 
unions  were  pacified  by  the  prohibition  of  the  importation 
of  the  products  of  con\'ict  labor,  and  by  provisions  for 
detailed  inspection  to  prevent  the  importation  of  such  con- 

1  60-61  Vic,  1897,  chap.  16.  '  Debates.  1897,  p.  3637. 

»  Ibid.,  p.  3592. 

*  60-61  Vic,  1897,  chap.  16,  sec.  262. 


134    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

vict-made  goods.^  Reductions  on  primary  products,  of 
course,  pleased  the  manufacturers  of  finished  products. 
The  free  entry  of  raw  materials  for  manufacture  is  un- 
doubtedly a  corollary  of  a  "national  policy,"  a  splendid 
arrangement  for  the  manufacturers,  in  so  far  as  they  use 
such  raw  materials,  and  probably  a  benefit  to  the  country 
as  a  whole,  to  the  extent  by  which  the  prices  on  finished 
products  may  be  thus  reduced. 

§  3.  This  arrangement  of  concessions  to  all  cannot  be 
fully  understood  without  a  consideration  of  the  bounty 
policy  involved  in  the  revision  of  1897,  and  continued  by 
the  bounty  acts  of  1897  and  1899.  As  there  were  only  four 
iron  and  steel  plants  on  the  bounty  list  in  1897,  the  Liberal 
Government  probably  could  have  ended  the  bounty  sys- 
tem without  a  great  dislocation  of  industry  ^  by  simply 
leaving  it  to  expire.  But  territorial  elements  in  politics, 
especially  the  interests  of  the  Maritime  Provinces,  as  well 
as  internal  difficulties  with  the  schedule  previously  consid- 
ered, forced  the  retention  of  the  bounty  system.  When  the 
general  duties  on  iron  and  steel  were  reduced  by  the  first 
Fielding  Budget,  the  bounties  were  retained  and  their 
scope  extended  to  make  amends  for  this  reduction  and  to 
equalize  conditions  for  the  iron  and  steel  manufacturers.' 

In  so  doing  the  scope  of  the  bounty  system  was  enor- 
mously enlarged.^  On  pig  iron  the  bounty  was  increased 
from  $2  to  $3  per  ton  when  made  from  native  ore,  and  a 
bounty  of  $2  per  ton  was  given  on  iron  made  from  im- 
ported ore.  The  bounty  on  puddled  bars  and  on  steel  bil- 
lets and  ingots  was  raised  from  $2  to  $3.  Whereas  up  to 
this  time  only  pig  iron,  steel  billets,  and  puddled  bars  had 
received  bounties,  under  the  law  of  1897  bounties  became 
payable  on  steel  ingots  also,  when  manufactured  in  Can- 

1  Debates,  1897,  pp.  3661-62. 

2  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  pp.  201-02. 

3  Debates,  1897,  p.  5186.  *  See  Appendix  D. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    135 

ada  from  components  of  which  not  less  than  50  per  cent 
weight  consisted  of  pig  iron  made  in  Canada.^  All  boun- 
ties were  to  be  payable  on  all  iron  and  steel  made  in  Can- 
ada between  April  23,  1897,  and  April  23,  1902.2 

Besides  extending  the  payment  of  bounties  for  a  period 
of  five  years,  advancing  the  rate  of  bounty,  and  extending 
the  system  to  steel  as  well  as  iron,  the  scope  of  the  bounty 
system  was  considerably  enlarged  by  the  inclusion  of  iron 
and  steel  produced  in  Canada  from  foreign  ore.  Bounties 
on  such  products  were  made  payable  in  proportion  to  the 
kinds  of  ore  used.  It  may  be  explained  that  in  1896  the 
newly  discovered  bed  of  ore  at  Bell  Island,  Newfoundland, 
was  under  the  control  of  the  Nova  Scotia  Steel  Company,' 
and  the  Hamilton  Furnace  was  beginning  to  use  American 
in  preference  to  Canadian  ore.  The  claim  that  the  clause 
giving  a  bounty  on  iron  produced  from  foreign  ore  was 
framed  in  the  interests  of  these  companies  is  justified. 
When  some  argued  that  bounties  should  be  given  on  iron 
made  from  native  ores  only,^  it  was  pointed  out  in  reply 
that  the  duty  on  iron  had  been  reduced  and  that  this  ar- 
rangement simply  balanced  the  reduction.  Of  course,  the 
Canadian  Government  maintained  that  it  objected  to  the 
subsidizing  of  American  ore,  but  it  believed  there  were 
reasons  for  stimulating  the  development  of  the  sister  col- 
ony of  Newfoundland.^  Indeed,  it  even  hoped  to  draw 
Newfoundland  into  the  union.^  Mr.  Fielding,  the  Finance 
Minister,  further  argued  that  a  bounty  on  iron  produced 
from  foreign  ore  would  create  a  market  for  native  ore,^ 
since  it  was  impossible  to  smelt  Canadian  ores  without 
adding  some  foreign  ores.  Mr.  Fielding  believed  that  the 
difference  in  the  bounties  on  iron  produced  from  foreign 
ore  and  iron  produced  from  native  ore  was  sufficient  to 

1  60-61  Vic,  1897.  chap.  6.  «  60-61  Vic,  1897.  chap.  11. 

'  E.  Porritt.  Iron  and  Steel  Bounties  in  Canada,  pp.  204-05. 
*  Debates,  July.  1899,  p.  7637.  »  McGrath,  op  cit.,  p.  5Si. 

6  Debates,  1899,  p.  7641.  ^  Ibid.,  p.  7643. 


136    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

stimulate  Canadian  mining,  even  though  the  United  States 
mines  were  rather  well  developed.  But  some  feared,  ^  though 
without  much  cause,  that  American  ore  alone  would  be 
used.^  At  all  events,  though  foreign  ore  probably  would 
have  been  used  even  without  the  bounties,  the  clause  per- 
mitted the  Canadian  manufacturer  to  use  foreign  ore 
freely.  This  was  a  valuable  concession  to  the  producers,  in- 
asmuch as  the  Nova  Scotia  companies  were  already  using 
Newfoundland  ore,  and  the  Hamilton  Furnace,  Lake 
Superior  ores.'  Mr.  Fielding,  however,  was  opposed  to 
admitting  even  Newfoundland  ore  to  the  full  bounty  lest 
this  should  involve  too  high  a  charge  on  the  Treasury.* 

The  Fielding  Bill,  as  first  presented,  provided  that  boun- 
ties should  be  paid  only  on  iron  and  steel  used  in  Canada. 
In  the  event  of  shipment  outside  of  Canada,  the  Governor- 
General  was  to  be  empowered  to  impose  an  export  duty 
equal  to  the  sum  paid  in  bounties  on  such  shipments.^  This 
resolution  was  supported  on  the  ground  that  otherwise  the 
bounty  system  would  attack  foreign  iron  and  steel  indus- 
tries, and,  at  the  same  time,  would  involve  the  taxation 
of  the  home  consumer  for  the  benefit  of  foreign  consumers: 
in  short,  it  would  attack  foreign  production  and  subsidize 
foreign  consumption.^  Mr.  Fielding  claimed,  with  some 
foresight,  that  the  United  States  and  Great  Britain  would 
object  and  that  the  hostility  of  other  countries  might  be 
aroused.' 

It  has  been  charged  that  Mr.  Fielding's  clause  was  in- 
serted in  favor  of  domestic  manufacturers  of  finished 
products,  who  wished,  if  possible,  to  benefit  from  the  boun- 
ties paid  the  pig-iron  producer.  If  no  bounty  was  paid  on 
exports,  the  producers  of  pig  iron  would  be  confined  to  a 
limited  home  market  where  they  would  sell  more  cheaply 

1  Debates,  pp.  7642-i3.  ^  gee  Appendix  B,  Table  I. 

2  Iron  Age,  vol.  LX,  September  23,  p.  13. 

4  Debates,  1899,  p.  7642.  ^  Ibid.,  1897,  pp.  1129-30. 

^  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  pp.  221-22. 
'  Debates,  1896,  p.  5196. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    137 

than  otherwise.  The  producers  of  the  finished  products 
hoped  to  gain,  not  only  from  reduction  of  the  duties  on  pig 
iron,  bar  iron,  and  steel,  but  also  by  the  grant  of  bounties.^ 

Mr.  Foster  objected  in  the  interest  of  Canadian  labor 
and  industrial  development.  He  argued  that  the  charcoal 
iron  produced  in  Quebec  was  used  largely  in  the  States. ^ 
It  would  be  a  difficult  matter  to  know  before  production 
whether  pig  iron  would  be  sold  at  home  or  abroad,  and 
hence  the  production  of  pig  iron  would  be  an  indefinite 
gamble.^  Mr.  Foster  hoped  that  bounties  would  put  the 
product  in  the  world  market,  and  by  encouraging  a  large 
output,  make  production  profitable  at  lower  costs  and  a 
lower  margin  of  profit.  After  all,  it  was  a  bounty  on  pro- 
duction, not  on  exportation  or  consumption.*  By  the  final 
draft  of  the  bill,  bounties  were  made  payable  on  all  pro- 
duction whether  consumed  in  Canada  or  exported  abroad.^ 

To  some  the  revision  of  the  tariff  and  bounty  laws  was 
a  disappointment.  Farmers,  especially,  had  hoped  for  a 
greater  reduction,  but  Mr.  Fielding  calmly  explained  that 
as  the  United  States  Government,  by  passing  the  Dingley 
Tariff,  registered  its  opposition  to  concessions,  the  Cana- 
dian Government  had  been  forced  to  modify  its  policy.  It 
also  seemed  advisable  to  go  slow  in  the  introduction  of 
changes  lest  industry  be  too  much  deranged.  Official  re- 
sponsibility had  taken  the  edge  off  the  enthusiasm  for  a 
"tariff  for  revenue  only."  In  presenting  the  schedule,  Mr. 
Fielding  called  attention  to  the  vested  rights  of  the  iron 
and  steel  industry  and  suggested  that  the  industry  was 
well  worth  encouraging  on  a  large  scale.  He  claimed  that 
the  bounties  would  be  automatically  reduced.  Even  though 
they  should  be  large,  there  would  be  a  compensatory  re- 
turn in  the  development  of  industry  and  the  consequent 
increase  of  customs  duties  at  ports  where  the  iron  and  steel 

1  Iron  Age,  vol.  Lix,  May  20,  p.  12.        »  Debates,  1897.  p.  5188. 
»  Ibid.,  1897,  p.  5193.  *  Ibid.,  pp.  3189-91. 

6  60-61  Vic,  1897,  chap.  6. 


138    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

industry  flourished.^  It  is  to  be  questioned  whether  the 
Liberal  Party  had  really  intended  at  the  last  moment  to 
make  such  sweeping  changes  as  the  election  platform  prom- 
ised. One  may  be  excused  for  the  suspicion  that  some  ar- 
rangement or  understanding  had  been  arrived  at  between 
the  Liberals  and  the  interested  manufacturers  before  the 
election. 

Altogether,  the  arrangement  was  a  clever  political  solu- 
tion of  a  very  difficult  political  and  industrial  problem. 
By  "Liberalizing"  the  bounties  to  cover  the  product  made 
from  imported  as  well  as  domestic  ore,  and  by  increases 
on  the  product  of  domestic  ore,  the  furnace-men  were 
compensated  for  the  reduction  of  the  duty  on  pig  iron  and 
on  scrap  iron  and  steel.  The  reduction  on  bar  iron  was 
acceptable  to  the  manufacturers  and  consumers  of  finished 
products  alike.  The  reduction  of  the  duty  on  puddled  bar, 
pig  iron,  and  scrap  iron  tended  to  balance  matters  for  the 
bar-iron  men.  Protection  naturally  had  to  be  diminished 
on  pig  iron,  the  first  of  the  series  of  products,  before  relief 
could  be  given  farther  up  the  scale.  Probably  no  better 
scheme  could  have  been  devised  to  accomplish  so  many 
different  objects.  The  adjustment  was  a  nice  balancing  of 
warring  interests;  and  mine-owners,  smelters,  rolling-mill 
owners,  manufacturers  using  iron  and  steel,  and  consumers 
alike  were  apparently  satisfied,  and  certainly  temporarily 
silenced.^ 

§  4.  One  might  have  expected  that  legislation  in  respect 
to  iron  and  steel  would  have  ended  here.  But  suddenly  a 
new  actor,  the  Dominion  Iron  and  Steel  Company,  ap- 
peared on  the  stage.  The  Nova  Scotia  Steel  Company, 
which  had  been  using  with  fair  success  a  mixture  of  New- 
foundland and  Pictou  County  ores  at  Ferrona,  was  con- 
templating extensions  at  Sydney  Mines,  Cape  Breton. 

*  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  pp.  216-17. 
2  Iron  Age,  vol.  lxit,  August  4,  p.  55. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    139 

The  Rathburn  interests  of  Deseronto,  Ontario,  were  mak- 
ing charcoal  iron,  the  Hamilton  Company  was  contemplat- 
ing extensions,  and  the  Canada  Iron  Fm*nace  Company 
was  building  at  Midland.  But  above  all,  the  Dominion 
Coal  Company  interests  were  considering  the  establish- 
ment of  works  at  Sydney,  Cape  Breton,  and  were  prepared 
to  build  provided  the  bounties  were  assured  for  a  certain 
period.^  By  1898  the  control  of  one  half  to  two  thirds  of 
the  ore  deposit  at  Bell  Island  had  passed  into  the  hands  of 
a  Boston  promoter  and  other  persons  connected  with  the 
Dominion  Coal  Company,  and  even  at  this  time  prelim- 
inaries had  been  begun  for  the  organization  and  promotion 
of  the  Dominion  Iron  and  Steel  Company. ^  This  WTiit- 
ney  Syndicate,  as  it  was  called  before  obtaining  its  char- 
ter, made  overtures  to  the  Laurier  Government  for  an 
extension  of  the  period  of  bounty  payments.^  Moreover, 
the  Nova  Scotia  Steel  Company  had  refused  to  build  at 
North  Sydney  unless  the  Government  would  give  assur- 
ance of  continuance  of  bounties  after  1902.^ 

Thus  it  was  that,  in  1899,  the  Bounty  Act  ^  was  amended 
by  adding  to  the  Act  of  1897  a  provision  that  the  bounties 
should  be  continued  from  1902  to  1907  on  a  decreasing 
scale.  The  rates  set  forth  in  the  1897  schedule  were  to  de- 
crease as  follows:  for  the  period  from  April  23,  1902,  to 
June  30,  1903,  90  per  cent  of  the  previous  bounties;  1904, 
75  per  cent;  1905,  55  per  cent;  1906,  35  per  cent;  and  1907, 
25  per  cent.  Mr.  Fielding  explained  that  the  object  of  this 
extension  was  to  give  the  industry  a  reasonable  measure 
of  encouragement  especially  as  considerable  development 
was  expected  ^  as  a  result  of  the  bounty  law.  Moreover, 
the  establishment  of  a  successful  iron  industry  assists  the 
development  of  many  other  industries.^  For  instance,  Mr. 

1  Debates,  1899,  pp.  4971-73. 

*  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  p.  204. 

'  Jeans,  op.  cit.,  p.  53.  ''  Iron  Age,  vol.  uii,  June  30,  p.  4. 

5  62-63  Vic,  1899,  chap.  8;  see  Appendix  D. 

«  Debates.  1899,  p.  4967.  ^  Ibid.,  pp.  4971-73. 


140    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Fielding  hoped  for  the  development  of  shipbuilding  in 
Canada.^  The  Government  also  wished  to  give  the  Domin- 
ion Iron  and  Steel  Company  the  assurance  that  bounties 
would  be  forthcoming  for  at  least  five  years  after  the  first 
blast  furnace  at  Sydney  could  be  put  on  the  bounty  list  at 
Ottawa.^  While  this  act  was  passed  three  years  before  the 
expiration  of  the  Act  of  1897,  it  was  an  advantage  that  the 
bounties  were  assured  for  eight  years  —  the  longest  period 
for  which  bounties  ever  had  been  provided  in  advance.^ 

This  act  had  the  further  advantage  of  providing  a  means 
of  gradually  letting  the  industry  stand  unaided.  Some  ob- 
jected to  the  bounty  system  altogether;  others  preferred  to 
make  it  a  permanent  part  of  the  fiscal  system,  but  the 
Government  struck  the  happy  medium.  Having  found  a 
bounty  system  in  operation,  it  was  ready  to  continue  it 
for  a  time  in  order  that  the  industries  growing  up  should 
get  firmly  established  and  be  able  to  stand  alone  within 
a  reasonable  time.^  Although  Mr.  Whitney  had  asked  for 
the  maximum  bounties  for  five  years,  the  graduated  scale 
was  deemed  suflBcient  for  the  purpose.^  The  Conservatives, 
too,  were  favorable.  Mr.  Tupper  even  wanted  the  bounty 
on  iron  made  from  Canadian  ore  applied  to  all  iron  made 
from  British  North  American  ore,  so  that  the  Newfound- 
land iron  deposits  might  aid  the  development  of  the  Cana- 
dian iron  industry.^ 

In  1901  and  1902  the  amount  of  bounties  paid  was  the 
subject  of  considerable  discussion.  The  prospectus  of  the 
Dominion  Iron  and  Steel  Company  was  quoted  to  show 
that  large  payments  were  expected.  Other  important 
companies  were  being  formed,  and  it  was  feared  that  the 
payments  would  become  unduly  heavy  as  the  companies 
grew.  An  establishment  like  that  of  the  Dominion  Iron 
and  Steel  Company,  with  a  capital  of  $25,000,000,  could 

1  Debates,  1899,  p.  4974.      2  g.  Porritt,  The  Revolt  in  Canada,  p.  117. 
3  Debates,  1899,  p.  4974.  *  Ibid.,  p.  4977. 

6  Ibid.,  pp.  4971-73.  ^  Ibid.,  p.  4976. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    141 

hardly  be  called  a  struggling  infant.^  Mr.  Fielding  an- 
swered this  criticism  with  his  well-known  argument  that 
the  development  of  the  industry  would  result  in  such  a 
growth  of  trade  and  prosperity  for  the  country  that  there 
would  be  no  loss  to  the  Government.^ 

§  5.  Difficulties  with  the  iron  and  steel  schedule  seemed 
never  to  end.  This  was  a  time  of  depression  in  the  United 
States  and,  therefore,  for  the  Canadian  iron  industry.  The 
American  Steel  and  Wire  Company  had  control  of  the 
Canadian  wire  market,  especially  the  market  for  barbed 
wire,  and  numbers  9, 12,  and  13  galvanized  wire,  which  had 
come  into  Canada  free  since  1897.  This  branch  of  the 
United  States  Steel  Corporation  was  a  great  enemy  to  the 
Canadian  industry,  so  much  so  that  some  Canadian  fac- 
tories had  completely  given  up  manufacturing  these  varie- 
ties.^ It  was  even  proved  that  the  sale  of  practically  all 
wire  in  Canada  was  temporarily  under  the  control  of  the 
American  trust.^  Until  1903  the  Dominion  Iron  and  Steel 
Company  had  not  secured  a  firm  hold  on  the  market  ^  for 
iron  and  steel,  yet  it  was  at  this  time  that  the  sliding  scale 
of  bounties  took  effect. 

It  was  pointed  out  that  the  tariff  and  bounty  system 
was  not  keeping  up  with  the  industry.  Rails  and  structural 
forms  were  now  being  manufactured,  and  should  have 
assistance  in  one  form  or  another.  The  Dominion  Iron 
and  Steel  Company  was  ready  to  produce  wire  rods. 
Though  the  manufacturers  of  steel  billets  and  ingots  were 
receiving  a  bounty  of  $2  per  ton,  manufacturers  of  structu- 
ral steel  received  nothing.^  While  structural  steel  weigh- 
ing less  than  35  pounds  per  yard  paid  a  duty  of  $7  per  ton, 
that  weighing  more  was  being  admitted  free  of  duty.  This 
discrimination  was  said  actually  to  discourage  the  produc- 

1  Debates,  1901,  p.  H70.  ^  /^-^^  igo],  p.  UTI. 

»  Ibid.,  1903,  p.  7953.  *  Ibid.,  p.  7935. 

^  Ibid.,  p.  7977.  ®  Industrial  Canada,  vol.  ii,  p.  321. 


142    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

tion  of  heavier  sections.^  The  tariff  and  bounties  of  1897 
protected  the  Nova  Scotia  Steel  Company's  products,  but 
no  pro\4sion  had  been  made  for  those  of  the  Dominion  Iron 
and  Steel  Company.  The  latter  could  not  produce  the 
protected  products  because  the  market  was  too  small  for 
both  companies.^  Thus,  the  bounty  and  tariff  system  was 
assisting  the  production  of  only  certain  products  and  the 
work  of  only  special  companies. 

The  manufacturers  were  not  entirely  in  favor  of  the 
bounty  system.  They  pointed  out  that  the  duties  on 
nearly  all  articles  were  considerably  lower  than  those  im- 
posed by  the  United  States,^  even  though  the  United  States 
market  was  very  large  and  the  industry  well  developed.* 
After  getting  the  different  manufacturers  to  concur  in  the 
proposals  for  protecting  the  different  grades  of  raw  mate- 
rials, the  Canadian  Manufacturers'  Association  presented 
a  tariff  in  1903  framed  on  the  basis  of  the  United  States 
tariff.  They  asked  for  the  following  advance  of  duties; 
on  pig  iron,  from  $2.50  a  ton  to  $3;  steel  rails,  from  $7  to 
$8;  steel  billets  from  $2  to  $4;  structural  steel,  $7  for  all 
sizes  up  to  45  pounds  per  yard  as  opposed  to  the  former 
limit  of  35  pounds  per  yard;  and  on  wire  rods,  which  were 
free,  a  duty  of  $6  per  ton  was  asked.^  In  1903,  Mr.  Borden, 
the  leader  of  the  Opposition,  introduced  a  resolution  in 
favor  of  increased  protection  to  the  iron  and  steel  indus- 
try in  the  form  of  higher  duties  on  finished  articles  largely 
imported.^ 

The  question  of  a  readjustment  of  iron  duties  was,  how- 
ever, a  delicate  matter.  Many  changes  are  necessary  if 
one  item  is  touched.  A  commotion  is  started  among  the 
manufacturing  interests  every  time  the  schedule  is  revised. 
It  is  difficult  to  harmonize  all  the  warring  interests.^  The 

*  Monetary  Times,  vol.  xxxvii,  p.  580.  ^  Debates,  1903,  p.  4291. 

'  Industrial  Canada,  vol.  iii,  p.  524.  *  Debates,  1903,  p.  4270. 

6  Iron  Age,  vol.  lxx,  March  19,  p.  23.  ^  Debates,  1903,  p.  3864. 
"  Iron  Age,  vol.  Lxxi,  January  15,  p.  22. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    143 

Government  hesitated  to  impose  duties  on  wire  rods  used 
for  making  wire  fencing  for  the  farmers.  Cheap  iron  for 
Canada  was  as  necessary  as  cheap  food  for  Great  Britain. 
A  high  tariff  on  certain  iron  products  which  could  not  be 
cheaply  produced  would  destroy  the  balance  of  the  iron 
schedule.  Certainly  it  had  injured  the  Conservative  Party 
in  1894.  For  these  reasons  the  tariff  proposed  by  the  Ca- 
nadian Manufacturers'  Association  was  not  accepted  and 
the  Borden  Resolution  was  rejected  as  quite  inoppor- 
tune.^ 

But  some  answer  had  to  be  given  to  the  various  demands, 
industrial  and  political.  Hence  it  was  that  the  bounty  sys- 
tem came  in  for  revision  again.  The  law  of  1899  was  so 
amended  as  to  provide  that  the  decline  of  bounties  should 
be  delayed  by  one  year,  although  the  bounties  by  a  differ- 
ent system  of  gradation  were  still  to  disappear  in  1907. 
At  the  same  time,  the  bounties  were  extended  to  a  new  line 
of  finished  products,  especially  those  which  were  about 
to  be  made,  and  which  were  the  subject  of  most  discussion 
by  the  Canadian  Manufacturers'  Association.  On  articles 
produced  from  steel  manufactured  in  Canada  from  com- 
ponents of  which  not  less  than  50  per  cent  of  weight  con- 
sisted of  pig  iron  made  in  Canada,  the  bounties  were  to  be 
as  follows:  on  rolled  round  wire  rods,-  $6  per  ton;  on  struc- 
tural material,^  and  rolled  shapes^  and  plates,^  $3  per 
ton.    The  producer  was  required  to  furnish  satisfactory 

1  Debates,  1903,  p.  4341. 

*  Less  than  three  quarters  of  an  inch  in  diameter,  when  sold  to  wire 
manufacturers  for  use  in  making  wire  in  their  own  factories  in  Canada. 

'  Rolled  angles,  ties,  channels,  beams,  joists,  girders,  or  bridge-building 
or  structural  sections. 

*  Not  round,  oval,  square,  or  flat,  weighing  not  less  than  35  pounds 
per  yard,  and  also  on  flat-eye  bar  blanks,  when  sold  for  consumption  in 
Canada. 

^  Not  less  than  30  inches  in  width  and  not  less  than  one  quarter  of  an 
inch  thick,  when  sold  for  consumption  in  Canada  for  manufacturing  pur- 
poses for  which  such  plates  are  usually  required,  not  including  plates  to 
be  sheared  into  plates  of  less  width. 


144.    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

proof  that  the  articles  were  produced  m  Canada  and  sold 
to  Canadian  consumers.^ 

Opinions  on  the  new  arrangement  varied.  Most  manu- 
facturers began  to  feel  that  bounties  could  not  be  piled  up 
without  provoking  public  disapproval.  The  more  success- 
ful the  system,  the  larger  the  sums  the  Treasury  would 
have  to  pay  out.  There  was  no  disguising  this  form  of  ex- 
penditure, especially  as,  after  1900,  it  had  been  charged  to 
capital  account.  Of  course,  the  burden  would  fall  largely 
on  the  general  public  who  would  contribute  to  the  revenues 
chiefly  by  paying  duties  on  imports  of  a  different  charac- 
ter. As  bounties  came  manifestly  from  the  people,  they 
were  likely  to  be  unpopular.^ 

Mr.  G.  E.  Drummond,  of  the  Canadian  Manufacturers' 
Association,  believed  that  the  bounties  of  1903  would  be 
a  very  valuable  aid  because  they  dealt  with  goods  about 
to  be  manufactured.  Since  bounties  on  finished  products 
give  a  motive  to  carry  production  beyond  the  primary  stage, 
he  expected  that  rolling  mills  would  be  hurried  to  comple- 
tion.^ Mr.  Drummond,  however,  would  have  preferred 
protective  duties. 

Even  if  the  revision  of  1903  was  not  entirely  satisfactory, 
the  Algoma  Steel  Company,  which  had  recently  begun  to 
make  steel  rails,  decided  to  make  the  most  of  it.  By  taking 
advantage  of  the  faulty  wording  of  the  law,  they  claimed 
bounties  for  steel  rails  under  the  term  "other  rolled,  not 
round,  shapes."  An  account  for  $60,000,  on  steel  rails 
bought  by  the  Government  itself,  was  handed  in.  The 
claim  was  disputed  by  the  Government  and  the  Auditor- 
General  refused  to  pay  it.^  In  1905  the  Government  passed 
an  Order-in-Council  providing  that  the  bounty  hitherto 
paid  on  steel  rails  should  no  longer  be  paid.  It  held  that 
the  original  reason  for  granting  the  bounty  was  the  en- 
couragement of  the  manufacture  of  structural  steel  for 

1  3  Ed.  Vn,  1903,  chap.  68.      ^  Iron  Age,  vol.  Lxxii,  July  16,  p.  18. 
3  Ibid.,  July  23,  p.  11.  *  Ibid.,  vol.  Lxxv,  p.  636. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    145 

bridge-making  and  other  purposes.^  A  duty  of  $7  per  ton 
had  already  been  provided  for  steel  rails.- 

§  6.  The  next  important  revision  came  in  1906.  For 
several  years  the  Government  had  been  pressed  to  revise 
the  tariff,  but  it  had  hesitated  in  favor  of  tariff  stability. 
In  1905  a  tariff  commission  was  appointed,  and  meetings, 
at  which  the  iron  and  steel  interests  adequately  presented 
their  case,  were  held  throughout  the  country.  A  company, 
established  at  Morrisburg  to  manufacture  tin  plate,  asked 
for  protection.  It  claimed  that  it  had  started  the  mill 
in  expectation  of  either  bounties  or  protection,  neither  of 
which  had  been  granted.  The  farmers  were  objecting  to 
any  extension  of  the  bounties  on  any  iron  and  steel  branch, 
and  the  tinware  manufacturers  in  Toronto  and  the  canning 
factories  of  Ontario,  British  Columbia,  and  Nova  Scotia 
objected  to  new  duties  on  their  raw  materials.  Consumers 
declared  that  Canada  was  not  ready  for  the  establishment 
of  a  tin-plate  industry.  The  demand,  at  reasonable  prices, 
was  not  sufficient  to  justify  the  operation  of  a  plant  on  a 
scale  large  enough  to  make  the  industry  profitable.^ 

While  the  producers  of  primary  products  asked  for  in- 
creased duties,  the  rolling-mill  deputation  protested  against 
any  increase.  They  held  that  the  duties  on  billets  and 
other  articles  should  be  left  as  before,  inasmuch  as  it  was 
impossible  to  get  adequate  supplies  of  all  grades  of  iron 
and  steel  in  Canada.*  The  Dominion  Iron  and  Steel  Com- 
pany asked  for  special  protection  against  the  United 
States  Steel  Corporation  in  respect  to  wire  rods,  but  wire- 
makers  claimed  that  if  duties  were  imposed  on  their  raw 
material,  some  compensatory  advantage  should  be  given.^ 
Makers  of  barbed  and  galvanized  wire  wanted  a  duty  of 
25  per  cent  in  order  to  enable  them  to  shake  off  the  domi- 

^  Canadian  Annual  Review,  1905,  p.  150. 

'  3  Ed.  VII,  1903,  chap.  15.  ^  /^^n  Age,  vol.  lxxvii,  p.  1658. 

*  Ihid.,  p.  1632.  5  Canadian  Annual  Review,  1905,  p.  159. 


146    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

nation  of  the  United  States  Steel  Corporation.'  The  cold- 
drawn  steel  plants  of  Hamilton  asked  for  increased  pro- 
tection to  compensate  them  for  duties  on  their  raw  mate- 
rials, and  the  cast-iron  pipe  men  asked  for  protection  against 
British  dumping.-  The  Montreal  Steel  Company  wanted 
higher  duties  on  steel  castings,  railway  switches,  and  frogs, 
to  offset  high  duties  on  s])ecial  grades  of  pig  iron  and  coal.^ 

A  proposal  to  abolish  the  duty  of  53  cents  per  ton  on 
coal  for  coking  purposes  was  the  occasion  of  considerable 
discussion.  The  Nova  Scotia  coal  companies,  of  course, 
objected  to  the  abolition  of  the  duty.*  The  Ontario  iron 
industry  had  to  admit  that  the  Nova  Scotia  iron  indus- 
try was  not  handicapped  by  the  duty  on  coal,  for  coal 
deposits  were  in  close  proximity  to  the  furnaces  and  the 
Province  granted  a  rebate  of  one  half  of  the  royalty  of  12^ 
cents  per  ton  on  coal  used  in  the  manufacture  of  iron. 
Ontario,  on  the  other  hand,  handicapped  by  dependence 
on  Pennsylvania,  demanded  an  equalization  of  conditions.* 
When  the  Algoma  Steel  Company  declared  that  the  loca- 
tion of  its  new  coking  plant  on  the  Canadian  side  or  at 
the  American  "Soo,"  depended  on  its  use  of  free  coal,®  the 
Government  decided  to  admit  coal  for  the  iron  industry 
practically  free  of  duty.'' 

In  the  new  tariff,  presented  in  1906,  an  attempt  was 
made  to  classify  items  as  nearly  as  possible  in  groups,  met- 
als and  manufacturers  of  metals  making  up  Class  8.  In 
this  revision  the  iron  and  steel  schedule  was  again  the  chief 
subject  of  alteration.  Some  changes  were  made  in  the 
working  of  the  tariff.  Lists  of  drawbacks  and  of  prohibited 
goods  were  appended.  A  new  "Intermediate  Tariff,"  be- 
tween the  general  and  British  preferential  tariffs,  was  in- 
troduced as  a  bait  to  countries  which  would  give  as  favor- 

1  Iron  Age,  vol.  Lxx^^,  p.  503.  ^  Ibid.,  pp.  572-73. 

3  Ibid.,  p.  503.  *  Debates,  1906-07,  pp.  3771-72. 

*  Iron  Age,  vol.  lxxvi,  p.  600.  ®  Ibid.,  vol.  lxxv,  p.  1145. 

'  Drawback  of  99  per  cent  of  the  duty. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    147 

able  conditions  as  those  offered  in  such  intermediate  tariff. 
In  order  to  simplify  calculation,  units  of  2|  per  cent  were 
adopted. 

Altogether  about  1£0  items  were  included  in  the  iron 
and  steel  schedule.  Not  all  items  were  changed  and  many 
changes  were  unimportant,  since  the  demand  for  the  goods 
was  very  small.  As  a  concession  to  the  Western  farmers, 
there  were  slight  decreases  of  about  2^  per  cent  on  some 
thirty  classes  of  agricultural  implements.  Drawbacks  of 
95  to  99  per  cent  were  given  on  certain  kinds  of  iron  and 
steel  imported  and  used  in  the  manufacture  of  certain 
articles  exported  from  Canada.  The  bounties  on  angles, 
plates,  and  structural  sections  were  abolished,  and  imports 
of  those  articles  were  subjected  to  a  duty  of  $7  per  ton  in 
place  of  a  duty  of  10  per  cent  plus  a  bounty  of  $3  a  ton. 
No  duty  was  imposed  on  tin  plate.  Coal  used  for  the  pro- 
duction of  coke  used  in  smelting  was  practically  exempted 
from  duty  by  provision  for  a  drawback  of  99  per  cent  of  the 
duty  paid.^ 

§  7.  The  revision  of  1906,  like  that  of  1897,  cannot  be 
fully  understood  without  some  knowledge  of  the  discussion 
centering  around  the  bounties.  In  the  previous  session, 
Mr.  Conmee,  of  Thunder  Bay  district,  had  introduced  a 
bill  to  revise  the  bounties  on  iron  and  steel  and  to  make  a 
greater  distinction  between  the  use  of  foreign  and  of  domes- 
tic ore.  He  hoped  for  a  great  development  of  the  iron  de- 
posits of  Canada,  especially  in  the  Thunder  Bay  district. 
He  claimed  that  no  one  would  contend  that  Canada  as  a 
nation  should  continue  to  pay  boimties  on  iron  made  from 
ore  from  any  foreign  country,  when  she  has  within  her  own 
borders  abundant  ore  of  good  quality.  He  pointed  out 
that  the  bounties  had  developed  the  industry,  but  largely 
on  a  basis  of  foreign  ore.  He  urged  that  the  bounties  were 
so  small  in  1906  (55  per  cent  of  the  1902  scale)  that  Cana- 
1  6-7  Ed.  VII,  1906-07,  chap.  11. 


148    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

dian  ore  had  little  advantage,  especially  as  iron  ore  entered 
Canada  free  of  duty,^  and  as  the  dumping  clause  did  not, 
therefore,  apply. ^  Why  should  Canadian  industry  be  de- 
pendent on  foreign  raw  materials?  Mr.  Conmee  believed 
that  the  development  of  Canadian  ores  and  mines  would 
be  a  -wise  precaution  against  any  possible  disturbance  of  in- 
ternational traffic  and  the  consequent  closing  of  Canadian 
furnaces.^ 

The  Government  took  the  view  that  to  keep  Canadian 
smelters  going  with  American  or  Newfoundland  ore  and 
to  develop  the  industry  with  Canadian  labor  and  capital 
would  be  more  important  than  to  mine  Canadian  iron  ores. 
The  time  will  come  when  Canada  will  need  her  own  ores. 
Mines  do  not  last  forever.*  The  Dominion  Iron  and  Steel 
Company  argued  that  it  was  reasonable  to  pay  bounties 
on  the  product  of  foreign  ore  in  order  to  maintain  and 
stimulate  the  industry  until  Canadian  mines  could  be  de- 
veloped, especially  as  it  was  necessary  to  import  some  ore 
to  mix  with  the  native  supplies.^  It  urged  the  renewal  of 
bounty  legislation,  on  the  ground  that  the  time  required  to 
establish  the  Sydney  industry  had  been  much  prolonged  by 
delays  and  difficulties.  The  company  was  not  in  the  as- 
sured position  which  it  had  expected  to  reach  before  the 
expiration  of  the  bounties;  moreover,  for  this  very  reason, 
the  Government  had  not  been  called  upon  to  pay  as  much 
as  had  been  expected  at  the  outset.® 

Mr.  Fielding  had  advocated  that,  in  1907,  the  bounties 
should  be  abolished,  and  the  duties  further  reduced.''  Yet 
Mr.  Conmee  and  the  iron  and  steel  interests,  who  appeared 
before  the  Tariff  Commission,  seem  to  have  succeeded  in 
presenting  a  satisfactory  case,  and  in  1906  the  bounty 
system  was  reinstated  for  another  four  years.    Bounties 

1  Debates,  1906,  pp.  3749-50.  ^  j^^^  p  3754 

3  Ibid.,  p.  3755.  ■•  Ibid.,  p.  3776.  ^  IMd.,  pp.  3769-71. 

®  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  p.  128. 
^  Debates,  1899,  p.  4970. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    149 

were  made  payable  on  pig  iron  made  in  Canada  from  Ca- 
nadian and  from  foreign  ore;  on  puddled  iron  bars  made  in 
Canada  from  pig  iron  made  in  Canada;  on  steel  manufac- 
tured from  ingredients  of  which  not  less  than  50  per  cent 
of  weight  consists  of  pig  iron  made  in  Canada;  on  rolled 
round  wire  rods;  and  also  on  pig  iron  made  in  Canada  from 
Canadian  ore  by  process  of  electric  smelting,  and  on  steel 
manufactured  in  Canada  by  electric  process  direct  from 
pig  iron  manufactured  by  electricity  in  Canada  from  Cana- 
dian ore  during  the  calendar  years  as  follows :  — 


Pig  iron  manufactured 

Steel 

Year 
(calendar) 

From 

Canadian 

ore 

From 

foreign 

ore 

electnc 
process 

Puddled 
iron 
bars 

Wire 
rods 

Ordinary 

M'fd  by 
electric 
process 

1907 
1908 
1909 
1910 
1911 
1912 

$2.10 

2.10 

1.70 

.90 

$1.10 

1.10 

.70 

.40 

$2.10 

2.10 

1.05 

.65 

$1.65 

1.65 

1.05 

.60 

$6.00 
6.00 
6.00 
6.00 

$1.65 

1.65 

1.05 

.60 

$1.65 

1.65 

1.05 

.65 

It  was  further  provided  that  the  bounty  on  pig  iron 
might  be  paid  on  molten  iron  used  in  the  manufacture  of 
steel  by  the  direct  electric  process,  the  weight  of  such  iron 
to  be  ascertained  from  the  weight  of  the  steel  so  manufac- 
tured.^ 

Thus,  a  nice  discrimination  was  made  in  favor  of  the 
Canadian  ore,  while  the  current  rate  on  iron  produced 
from  foreign  ore,  on  puddled  bars,  and  on  steel,  was  simply 
extended  at  a  declining  rate  until  1910.  In  view  of  the 
fact  that  it  requires  two  years  to  establish  such  smelting 
furnaces,^  the  rates  of  iron  and  steel  made  by  electric 
process  were  to  apply  from  December  31,  1908,  to  Decem- 
ber 31,  1912.  As  we  have  already  seen,  the  bounties  on 
structural  sections,  plates,  etc.,  were  abolished  in  favor  of 
customs  duties. 

1  7  Ed.  VII,  1907.  chap.  24.  «  Debates,  1906-07,  p.  7-154. 


150    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

This  act,  unlike  the  Act  of  1897,  did  not  provide  for  the 
payment  of  bounties  on  iron  and  steel  exported  from  Can- 
ada. As  Mr.  Fielding  had  foreseen,  the  Secretary  of  the 
United  States  Treasury,  on  complaint  of  American  pro- 
ducers, was  threatening  to  impose  countervailing  duties 
on  Canadian  iron  and  steel. ^  British  iron-makers  had  also 
been  protesting.  Indeed,  international  complications  or 
tariff  wars  were  imminent. ^  Pig  iron  of  varying  amounts 
had  been  exported  to  the  United  States  and  elsewhere  con- 
tinually after  1897;  $55,448  in  1896,  $149,000  in  1899, 
$778,619  in  1902,  and  $22,284  in  1905.^  Countervailing 
duties  would  have  completely  excluded  such  goods  from 
the  United  States.  Besides,  with  the  occasional  large  ex- 
ports, the  force  of  the  old  argument  that  bounties  on 
exports  would  help  maintain  prices  in  Canada  may  easily 
be  seen.  That  the  consumers  of  pig  iron  would  urge  their 
old  objection  against  bounties  which  might  provoke  coun- 
tervailing duties  on  finished,  as  well  as  primary,  products 
entering  the  United  States,  was  a  foregone  conclusion. 
Furthermore,  it  was  noised  abroad  that  the  United  States 
Steel  Corporation  would  build  in  Canada  in  order  to  secure 
the  benefit  of  the  bounties.*  The  act,  therefore,  provided 
that  bounties  should  be  paid  on  pig  iron,  bars,  and  steel, 
only  when  manufactured  in  Canada  for  consumption 
therein;  further,  that  no  bounty  should  be  paid  on  steel 
ingots  from  which  steel  blooms  and  billets  for  exportation 
from  Canada  were  manufactured,  except  that  no  prohibi- 
tion was  made  of  payment  of  bounties  on  exports  of  iron 
and  steel  manufactured  by  electric  process.^  The  Customs 
Act  Amendment  of  that  year  (1907)  made  further  provi- 
sion that  every  person  who  desired  to  export  any  such 
articles,  subject  to  a  bounty  when  used  for  home  consump- 

'  Iron  Age,  vol.  lxxii,  p.  4.  "^  Ibid.,  vol.  lxxxii,  p.  1081. 

'  See  Appendix  F. 

^  E.  Porritt,  Iron  and  Steel  Bounties  in  Canada,  pp.  220-21. 
5  7  Ed.  VII,  1907.  chap.  24. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    151 

tion,  but  not  for  exportation,  should  file  with  the  nearest 
Collector  of  Customs  a  written  application  for  permission 
to  export  and  a  declaration  that  the  bounty  had  not  been 
paid,  that  it  would  not  be  claimed,  or  that,  if  paid,  the  sum 
had  been  refunded  to  the  Government.^ 

Various  farming  and  grain-growing  interests,  in  sixty- 
five  petitions  against  the  renewal  of  the  bounties,  insisted 
that  the  industry  had  reached  a  stage  where  it  could  stand 
on  its  own  feet.^  In  a  caucus  of  the  Liberal  Party,  some 
stood  by  the  farming  interests  by  asking  for  an  abandon- 
ment of  the  bounty  on  pig  iron  made  from  imported  ore, 
but  this  suggestion  was  opposed  by  Nova  Scotia  interests.^ 
The  Opposition  even  insinuated  that  the  chief  beneficiary 
of  the  bounty  system,  the  Dominion  Iron  and  Steel  Com- 
pany, was  located  in  Nova  Scotia,  the  Province  of  which 
Mr.  Fielding  was  the  political  leader.^ 

In  reply,  Mr.  Fielding  argued  that  it  was  as  proper  to 
pay  bounties  in  1907  as  in  1887.^  If  bounty  legislation  was 
not  adopted,  then  customs  duties  would  have  to  be  in- 
creased all  round  or  else  the  industry  would  fail  and  dis- 
appear. As  wire  rods,  on  which  bounties  had  been  paid 
since  1904,  were  not  finished  articles,  the  Government  re- 
fused to  impose  a  duty  that  would  necessitate  changes  of 
duties  on  other  articles  made  from  iron  and  steel. ^ 

To  some  objection  raised  against  the  expenditure  in- 
volved, Mr.  Fielding  replied  that  the  Treasury  had  not 
and  would  not  lose  a  cent  on  the  payment  of  bounties.  He 
had  always  claimed  that  the  iron  and  steel  industries  estab- 
lished in  the  country  had  developed  trade  a  long  distance 
from  the  plants,  for  not  only  had  the  trade  centers  of  Can- 
ada sold  to  these  industrial  centers,  but  above  all,  millions 
had  been  paid  into  the  Treasury  at  the  various  ports 

^  Customs  Act  Amendment  Act,  1907. 
2  E.  Porritt,  The  Revolt  in  Canada,  p.  134. 
'  Iron  Age,  vol.  lxxix,  p.  428. 

*  E.  Porritt,  Sixty  Years  of  Protection  in  Canada,  p.  454. 

*  Debates,  1906-07,  p.  49G1.  «  Ibid.,  pp.  311-12. 


152    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

(much  by  the  iron  and  steel  companies  themselves)  that 
had  been  developed  by  the  growth  of  the  iron  and  steel 
industry.  The  "Soo,"  Sydney,  North  Sydney,  Sydney 
Mines,  Glace  Bay,  and  New  Glasgow  were  small  centers 
before  the  development  of  the  industry,  and  the  growth  of 
Hamilton  had  undoubtedly  been  greatly  advanced  by  the 
presence  of  the  iron  and  steel  industry.  He  estimated, 
therefore,  that  the  increase  of  customs  duties  at  such  ports 
had  almost  fully  reimbursed  the  Treasury,  and,  certainly, 
if  like  supplies  entered  at  St.  John,  Halifax,  Toronto,  Mon- 
treal, and  Quebec  be  counted,  it  might  be  considered  that 
every  dollar  had  been  returned  to  the  Government.^  This 
argument  has  been  Mr.  Fielding's  chief  defense  of  the 
bounty  system  at  various  periods  of  criticism  throughout 
the  Liberal  regime.  There  is  no  doubt  whatever  that  the 
customs  receipts  at  such  places  have  greatly  increased 
during  the  past  fifteen  years.  Between  1897  and  1901  they 
increased  by  $1,711,815  per  year,  whereas  only  $1,247,341 
was  paid  as  bounties.^  Between  1900  and  1909,  the  increase 
amounted  to  over  $9,000,000,  principally  due  to  the  devel- 
opment of  the  iron  and  steel  industry.^  About  $11,000,000 
was  paid  in  bounties  during  that  period.* 

Unfortunately,  Mr.  Fielding  overlooked  the  considera- 
tion of  one  very  simple  but  frequently  neglected  fact; 
namely,  that  a  large  part  of  the  industry  had  been  devel- 
oped by  conditions  quite  independent  of  the  bounty  sys- 
tem. Just  in  so  far  as  the  industry  would  have  been,  or  has 
been,  developed  for  other  reasons,  the  bounties  paid  rep- 
resent a  direct  expenditure  of  the  Federal  Government, 
uncompensated  by  an  increase  of  the  duties  collected,  be- 
cause they  would  have  been  paid  to  the  Treasury  whether 
or  not  the  bounty  system  had  existed.  What  part  of 
the  industry  would  have  been  developed  without  the  boun- 
ties may  be  determined  later.    In  the  mean  time,   it  is 

1  Debates,  1906-07,  p.  3762.  ^  Industrial  Canada,  vol.  iv,  p.  65. 

'  Canadian  Mining  Journal,  vol.  xxxi,  p.  208.         *  See  Appendix  E. 


fflSTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    153 

important  to  notice  the  Minister's  uncritically  accepted 
assumption. 

§  8.  One  might  almost  think  that  the  Liberal  Govern- 
ment had  developed  a  habit  of  renewing  the  bounty  sys- 
tem; certainly  it  had  set  several  precedents.  Furthermore, 
the  loss  of  Liberal  seats  in  the  election  of  1908  was  an  item 
in  favor  of  retention  of  the  bounties.^  The  iron  and  steel 
interests  were  favoring  an  extension  to  cover  steel  ship- 
building.2  They  also  held  that  1910  was  a  bad  year  in 
which  to  remove  the  bounties,  since  the  German  Surtax  had 
but  recently  been  abolished.  The  amount  of  imports  from 
Great  Britain  and  the  possible  concessions  to  the  United 
States  were  other  imfavorable  factors.' 

Since  the  iron  and  steel  industry  had  always  been  the 
Liberal  pet,  the  Government  would  probably  have  re- 
newed the  bounties  or  given  protection  but  for  the  vigor- 
ous and  organized  opposition  of  the  farmers,  the  dumping 
of  rails  in  England,  India,  and  Australia,  and  the  spread 
of  the  combination  movement.*  By  the  spring  of  1910 
it  was  agreed  that  no  bounties  should  be  renewed  and 
that  those  on  wire  rods  should  not  be  paid  after  June  30, 
1911.5 

The  ending  of  the  bounty  system  was  sad  news  to  the 
manufacturers  of  iron  and  steel,  who  wanted  to  have  the 
bounties  on  wire  rods  renewed  for  at  least  a  year,  but  the 
political  tour  of  Sir  WiKrid  Laurier,  Mr.  Fielding,  and 
other  prominent  members  of  the  Government  through 
western  Canada  in  the  summer  of  1910  convinced  them 
that  their  decision  had  been  politically  sound.  The  infec- 
tion of  Reciprocity  resolutions  and  agreements  gave  pro- 
posals for  the  continuation  of  the  bounties  a  final  death- 
blow, so  far  as  the  Liberal  Party  was  concerned. 

^  Iron  Age,  vol.  Lxxxn,  p.  1994.  '  Ibid.,  vol.  lxxxv,  p.  266. 

'  Ibid.,  vol.  Lxxxii,  p.  524.  *  Nation,  vol.  xci,  pp.  257-58. 

6  Debates,  1910,  p.  8363. 


154    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  9.  Probably  no  other  piece  of  Canadian  commercial 
legislation  was  ever  accepted  with  so  little  criticism  as  the 
bounty  system,  as  applied  to  iron  and  steel.  Almost  all 
interests  have  lauded  this  general  system  as  a  desirable 
and  constructive  policy,  a  distinct  encouragement  to  the 
recipients,  and  a  benefit  to  the  consumers  of  iron  and  steel 
products.  Parliamentary  discussion  centered  about  de- 
tails alone.  Even  the  Conservative  Opposition  was  favor- 
able. Sir  Charles  Tupper  wanted  to  have  Newfoundland 
ore  treated  as  native  ore.  George  Foster,  the  leader  of 
protectionists,  welcomed  Mr.  Fielding  into  the  fold.  The 
farmers,  usually  unorganized,  were  not  taken  seriously. 

Now  that  the  history  of  the  bounty  system  has  been 
recorded,  it  is  in  place  to  estimate  the  value  and  wisdom 
of  the  scheme.  This  is  not  an  easy  task,  and  the  most  that 
can  be  done  at  this  point  is  to  discuss  the  merits  of  boun- 
ties as  opposed  to  duties.  If  protection  had  not  been 
afforded  in  the  form  of  tariff  duties  and  bounties,  —  that 
is,  if  bounties  alone  or  protective  duties  alone  had  been 
granted,  —  the  issue  would  have  been  clear;  and  whatever 
system  existed  could  have  been  freely  discussed  on  its  own 
merits.  But  ever  since  the  introduction  of  the  bounty  sys- 
tem in  1883,  the  problem  has  never  been  so  simple.  It  is 
quite  impossible  to  discuss  the  bounty  system  apart  from 
a  consideration  of  the  duties,  or  the  tariff  system  apart 
from  the  bounties,  —  at  least,  so  far  as  the  wisdom  of 
adopting  a  protective  policy  is  concerned. 

It  is  obvious  that  granting  bounties  is  a  practice  per- 
taining to  the  protective  policy,  and  no  one  who  favors 
the  bounty  system  can  hide  beneath  the  free-trade  mantle. 
The  fundamental  purpose  of  a  bounty  system  and  of  pro- 
tective duties  is  identical;  namely,  the  temporary  or  per- 
manent assistance  of  an  industry  under  alleged  and  pos- 
sibly actual  disadvantages.  Whether  or  not  such  a  policy 
in  any  form  has  been  justified  by  Canadian  experience  is  a 
consideration  which  must  be  postponed,  pending  a  more 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    155 

detailed  discussion  of  the  development  of  the  Canadian 
industry. 

In  the  mean  time,  let  us  assume,  for  convenience,  that 
a  protective  policy  was  necessary  in  Canada  for  reasons 
political  or  economic,  whether  from  the  point  of  view  of 
pure  expediency  or  fundamental  economic  causes.  This 
has  been  the  assumption  on  which  have  proceeded  both 
the  Conservative  Party  and,  with  qualifications,  the  Lib- 
eral Party  in  Canada.  Meanwhile,  our  immediate  problem 
is  that  of  determining  the  relative  merits  of  duties  and 
bounties  as  a  protective  system. 

Both  parties,  as  we  have  seen,  were  confronted  with 
most  embarrassing  internal  difficulties  in  the  iron  and  steel 
schedule.  The  nature  of  that  situation  scarcely  need  be 
repeated.  It  was  on  these  rocks  that  the  Conservative 
Party  found  itself  stranded  in  1896,  and  the  Liberal  Party 
very  shortly  after  found  the  way  out  beset  mth  serious 
dangers.  And  yet  the  channel  had  been  traversed  before. 
The  pilots  had  been  disqualified  by  the  election  of  1896, 
but  the  beacon  lights  were  set  to  guide  the  returning  Liberal 
Party,  which  had  not  been  in  power  since  1878.  Thus  it 
was  that  when  it  seemed  desirable  on  all  scores  to  reduce 
the  protection  afforded  by  tariff  duties,  the  actual  amount 
of  protection  was  but  slightly  reduced  owing  to  the  exten- 
sion of  the  bounty  system  in  1897. 

Just  as  it  was  a  mistake  for  the  Conservative  Party  to 
raise  the  duty  on  scrap  iron  in  1894,  so,  too,  it  would  have 
been  a  political  blunder  had  the  Liberals  failed  to  reduce 
the  duties  on  iron  and  steel  in  1897.  The  manufacturers, 
always  a  strong  and  influential  political  body,  were  clamor- 
ing for  lower  duties  on  pig  iron,  and  steel  billets,  as  well  as 
on  scrap  iron.  Likewise,  the  duties  on  finished  products 
had  to  be  slightly  reduced  if  the  farming  interests  were  to 
be  satisfied.  Thus,  political  necessity  as  well  as  economic 
convictions  favored  the  downward  revision  of  the  customs 
tariff.    On  the  other  hand,  the  iron  and  steel  interests, 


156    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

which  had  suffered,  had  to  be  compensated  if  no  interest 
was  to  be  alienated  from  the  Liberal  Party.  Economically, 
the  movement  was  quite  sound  so  far  as  the  internal  ar- 
rangements of  a  protective  system  were  concerned.  One 
argument  in  particular  favors  the  bounty  form  of  protec- 
tion. As  we  have  seen,  Canada  has  been  and  is  a  large 
consumer  of  iron  and  steel  goods.  Between  1897  and  1911, 
the  annual  consumption  of  pig  iron  had  increased  from 
62,194  tons  to  878,093  tons.  In  1908,  a  year  of  depression, 
and  in  1910,  the  consumption  exceeded  900,000  tons.  In 
the  calendar  year  1912,  the  total  Canadian  production 
alone  exceeded  1,000,000  tons.^  The  consumption  of  steel, 
which  is  being  used  in  the  manufacture  of  an  increasing 
number  of  products,  has  no  doubt  increased  even  more 
rapidly,  especially  in  recent  years.  The  rapid  expansion  of 
Canadian  farming  interests  has  given  rise  to  an  enormous 
demand  for  wire  fencing,  dependent  on  wire  rods.  Like- 
wise, the  extension  of  railway  mileage  has  involved  a  large 
demand  for  bridge-building  and  railway  supplies.  Finally, 
the  use  of  structural  steel  for  building  purposes  is  an  im- 
portant source  of  the  demand  for  the  products  of  iron  and 
steel. 

Had  customs  duties  instead  of  bounties  been  granted, 
the  prices  of  such  iron  and  steel  products  would  naturally 
have  been  raised  to  some  degree.  The  extent  to  which  the 
benefit  of  the  duties  could  have  been  used  would  have  varied 
from  time  to  time  according  to  the  conditions  of  the  market 
at  home  and  abroad.  The  piling  up  of  stocks  in  the  hands 
of  United  States  producers  has  nearly  always  disorganized 
the  Canadian  market  because  of  the  possible  or  actual 
dumping  of  such  suiplus  stocks.  And  yet  the  enactment 
of  high  customs  duties  would  ordinarily  have  raised  prices 
above  the  American  scale,  at  times  to  the  full  extent  of  the 
duty.  The  rapid  increase  in  the  demand  for,  and  the  con- 
sequent increase  in  the  prices  of,  iron  and  steel  from  1897 
*  See  Appendix  B,  Table  I. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    157 

to  1902  would  doubtless  have  aided  the  Canadian  producers 
to  the  extent  of  the  increase  in  prices,  plus  the  Canadian 
duty.  As  a  matter  of  fact,  it  was  just  this  advance  in 
prices  in  spite  of  the  lack  of  duties  that  was  one  of  the 
more  favorable  conditions  for  the  development  of  the  Ca- 
nadian industry  between  1896  and  1902. 

If  Canada  had  been  a  large  exporter  of  iron  and  steel, 
the  result  might  have  been  otherwise,  but  when  a  nation 
becomes  an  importer,  or  so  long  as  a  country  imports  ar- 
ticles whether  or  not  they  are  produced  at  home,  the  tend- 
ency is  for  the  importing  country  to  pay  duties  in  the 
form  of  higher  prices.  The  exporter  pays  the  duty  only 
to  the  extent  that  producers  belonging  to  the  importing 
nation  meet  the  foreign  price,  plus  the  freight  rates,  and 
other  incidental  charges.  Ordinarily,  as  we  shall  see,  Ca- 
nadian producers  have  not  been  able  to  supply  the  total 
Canadian  demand  at  such  prices,  and  the  existence  of  the 
Canadian  duties  would,  therefore,  have  been  a  great  bur- 
den on  the  Canadian  consumers  of  the  various  iron  and  steel 
products,  especially  pig  iron  and  steel  billets. 

Bounties,  on  the  other  hand,  subsidize  the  home  pro- 
ducers, arid  offset  a  part  of  the  costs  of  production.  Con- 
sequently goods  can  be  sold  at  prices  that  might  not  other- 
wise be  profitable.  Foreign  goods  are  admitted  free  of  duty 
or  at  lower  rates  than  would  otherwise  have  been  necessary, 
much  to  the  advantage  of  the  consumer.  Producers  bene- 
fit according  as  they  are  able  to  retain  the  bounties  and 
yet  compete  with  foreign  producers.  Home  production  is 
thus  made  possible  without  an  increase  in  the  price  of  the 
product  to  the  manufacturing  consumer. 

Under  a  system  of  duties  the  consumer  is  presumed  to 
pay  the  increase  of  prices  on  all  the  goods  consumed;  under 
a  bounty  system  the  consumer  pays  only  the  bounties  on 
that  part  of  the  goods  produced  within  the  country.  The 
consumers  of  other  imported  and  dutiable  goods  may  pay 
the  bounties  and  the  consumer  of  bountied  iron  and  steel 


158    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

products  may  get  off,  for  the  greater  part,  unburdened. 
In  such  circumstances,  a  bounty  system  is  obviously  pref- 
erable to  the  imposition  of  so-called  "adequate"  customs 
duties. 

Another  advantage  in  the  bounty  system  is  the  fact  that, 
strangely  enough,  it  digs  its  own  grave,  while  the  recipients 
of  the  bounties  are  content  to  have  the  system  buried.  A 
bounty  system  that  is  successful  (in  so  far  as  the  develop- 
ment of  an  industry  may  be  taken  as  a  mark  of  success) 
necessitates  the  expenditure  of  a  direct  outlay  from  the 
Treasury,  and  although  Mr.  Fielding  was  able  to  convince 
the  iron  and  steel  interests,  including  the  manufacturing 
consumers  of  iron  and  steel,  that  the  bounties  had  been 
entirely  repaid  by  an  increase  in  the  collection  of  duties 
directly  resulting  from  the  development  of  the  iron  and 
steel  industry,  he  found  it  increasingly  difficult  to  persuade 
the  general  public  of  this  fact.  Here  was  a  plausible  excuse 
for  the  payment  of  bounties  amounting  to  only  $610,607 
from  1883  to  1895,  but  between  1895  and  1913,  $16,785,827  ^ 
was  paid:  enough  to  build  an  iron  and  steel  plant  that 
would  produce  an  output  probably  as  large  as  that  of  the 
Dominion  Steel  Corporation,  and  far  more  than  enough 
to  produce  all  the  Government  purchases  of  iron  and  steel 
products  for  railway  and  other  purposes.  Such  an  expen- 
diture cannot  fail  to  excite  the  critical  observation  and  dis- 
cussion of  those  who  do  not  favor  a  protective  policy. 

Besides,  the  bounty  system  was  admittedly  a  policy  of 
expediency,  temporarily  adopted  and  subject  to  a  decline 
of  rates.  Thus,  the  Canadian  system  was  finally  allowed 
to  pass  away  between  1910  and  1912,  at  a  time  when  public 
discussion  seemed  especially  unfavorable  to  a  renewal. 

§  10.  The  tariff  bargain  of  1906  represented  a  down- 
ward revision  with  the  exception  of  duties  on  angles,  tees, 
etc.    The  farmers  were  disappointed  that  the  tariff  had 
^  See  Appendix  E. 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    159 

not  been  further  reduced,  yet  they  felt  that  they  had  prob- 
ably come  out  on  the  right  side  of  the  bargain.  Manufac- 
tm-ing  interests,  hoping  for  higher  protection,  were  even 
more  critical,  and  from  1906  to  the  present  time  have  made 
recurring  requests  for  higher  duties  on  several  iron  and 
steel  products.  But  few  changes  have  been  made.  In  1907 
and  1910  Mr.  Fielding  said  that  the  tariff  was  working 
well,  and  that  nothing  would  be  done.^  In  1911,  the  agree- 
ment resulting  from  negotiations  for  reciprocity  with  the 
United  States  included  the  admission  of  wire  rods  free  of 
duty.  While  rods  were  at  that  time  on  the  free  list,  the 
iron  and  steel  interests  nevertheless  objected  to  the  inclu- 
sion of  wire  rods.  Such  a  treaty  would  have  made  the  in- 
crease of  duties  favoring  this  branch  of  the  industry  prac- 
tically impossible.  Consequently  the  iron  and  steel  people 
threw  their  influence  in  favor  of  the  Conservatives  who 
opposed  the  agreement. 

Encouraged  by  the  results  of  the  election  of  1911,  which 
placed  in  power  the  traditionally  high-protective  Conserv- 
ative Party,  the  iron  and  steel  people  immediately  pressed 
for  an  advance  in  duties  on  certain  iron  and  steel  goods. 
A  memorial,  presented  to  the  new  Finance  Minister,  Mr. 
W.  T.  White,  in  1912,  failed,  however,  to  move  him  from 
Mr.  Fielding's  policy  of  tariff  stability.  The  years  1912 
to  1914  brought  with  them  extraordinary  conditions.  As 
the  United  States  iron  and  steel  industry  had  been  in  a 
state  of  depression,  wire  rods  were  being  sold  in  Canada 
at  a  price  below  the  average  cost  of  production  in  Canada. 
Meanwhile  the  Dominion  Steel  Corporation  had  invested 
about  $1,000,000  in  a  rod  mill  capable  of  producing  about 
100,000  tons  a  year,  and  the  Steel  Company  of  Canada 
had  built  a  $750,000  mill  capable  of  producing  about  75,000 
tons  a  year.  While  both  of  these  mills  have  been  only  par- 
tially operated,  92,000  tons  of  the  annual  consumption  of 
150,000  to  200,000  tons  of  wire  rods  were  imported  into 
^  Iron  Age,  vol.  lxxxiii,  p.  481. 


160    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Canada  in  1913.  Consequently  the  two  companies  renewed 
their  appeals  for  tariff  revision,  finally  with  success. 

Small  makers  of  nails  in  Canada  objected  to  the  advance 
of  duties  on  wire  rods,  their  raw  materials.  Of  the  Cana- 
dian production  of  nails  (approximately  1,500,000  kegs  per 
annum)  about  17  per  cent  is  produced  by  the  Dominion 
Steel  Corporation  and  its  ally,  the  Pender  Company  of 
St.  John;  52  per  cent  by  the  Steel  Company  of  Canada; 
and  about  30  per  cent  by  the  smaller  independent  nail- 
makers  in  Canada.  The  smaller  firms  justly  fear  that  the 
price  of  their  raw  material  will  be  advanced  by  the  larger 
companies;  there  is  no  doubt  of  this,  or  what  would  be  the 
advantage  of  the  duties  to  the  producers  of  wire  rods, 
which  are  used  largely  by  the  finishing  mills  of  the  large 
companies  themselves? 

The  Government  decided,  however,  that  the  desirability 
of  favoring  the  production  of  wire  rods  outweighs  the  ob- 
jections of  the  smaller  nail-makers,  especially  as  the  nail- 
makers  are  protected  by  a  duty  of  35  per  cent.  Conse- 
quently, on  April  6,  1914,  the  tariff  was  revised  to  provide 
for  duties  on  wire  rods  as  follows:  $2.25  per  ton  under 
the  British  preference,  and  $3.50  under  the  intermediate 
and  general  tariffs.  The  duties  on  wire  nails  and  on  wire 
were  not  advanced. 

A  similar  situation  arose  in  another  direction.  The  Al- 
goma  Steel  Corporation  at  Sault  Ste.  Marie,  made  repre- 
sentations that  if  the  same  duties  were  imposed  on  mer- 
chant mill  products  weighing  over  35  pounds  per  yard,  as 
on  those  weighing  less,  the  company  would  be  able  to  ob- 
tam  capital  for  the  erection  of  mills  capable  of  producing 
products  of  a  weight  of  120  pounds  per  Imeal  yard.  The 
tariff  was,  accordingly,  revised  to  provide  for  a  duty  of 
$4.25  under  the  preference,  $6  under  the  intermediate 
tariff,  and  $7  under  the  general  tariff  on  rolled  iron  and 
steel  and  angles,  beams,  etc.,  weighing  less  than  120  pounds 
per  yard.   This  item  in  the  tariff  is  thus  supposed  to  be 


HISTORY  OF  TARIFF  AND  BOUNTY  SYSTEM    IGl 

modernized,  in  line  with  the  general  Canadian  tariff  policy 
of  moderate  protection.^ 

Such  were  the  conditions  and  features  of  the  chief 
changes  in  1914.  These  alterations  cover  the  items  around 
which  the  greater  part  of  the  discussion  has  centered  in 
recent  years.  Apparently  the  chief  requests  of  the  iron 
and  steel  people  have  been  met.  It  is  difficult,  however, 
to  predict  the  future  course  of  events.  The  iron  and  steel 
interests,  encouraged  by  this  success,  will  probably  ask  for 
an  advance  of  duties  on  the  primary  products,  pig  iron  and 
steel  billets.  Mr.  White  has  declared  himself  against  high 
duties  on  these  articles,  the  raw  materials  of  such  a  variety 
of  industries;  especially  as  an  advance  would  necessitate 
an  increase  of  duties  on  nearly  all  products  into  which  they 
enter  as  raw  material. 

^  Debates,  1914,  pp.  2546-48;  and  Memorandum  of  Department  of 
Customs,  April  7,  1914. 


CHAPTER  VIII 

VARIOUS  FEATURES   OF   TARIFF   AND   BOUNTY 
LEGISLATION 

§  1.  In  1896  the  Liberals  promised  that  if  they  were 
placed  in  power  duties  would  be  reduced.  The  general  re- 
duction on  most  articles  in  that  year  amounted  to  about  10 
per  cent  of  the  duties  in  force  before  1896.  On  a  few  articles 
the  reduction  of  duties  was  greater;  as  much  as  40  per  cent 
on  pig  iron,  60  per  cent  on  steel  billets  and  ingots,  and  75 
per  cent  on  wrought  scrap  iron  and  steel.  Since  bounties 
were  granted  as  temporary  compensation  to  the  producers 
of  these  articles  on  which  the  important  reductions  were 
made,  the  producers  were,  for  the  time  being,  in  about  the 
same  situation  as  before  the  revision. 

A  new  kind  of  reduction  was  adopted  in  1896  in  the  form 
of  the  British  preference.  Under  the  Imperial  Acts  that 
applied  previous  to  1847,  goods  from  the  United  Kingdom 
or  other  British  possessions  were  admitted  free  of  duty; 
and  after  the  repeal  of  the  Imperial  Act,  some  of  the  Prov- 
inces admitted  British  goods  at  specially  favorable  rates; 
but  this  preferential  principle  had  long  since  disappeared 
from  Canadian  tariff -making.  When  the  tariff  was  revised 
in  1896,  and  the  preference  introduced,  it  was  hailed  as  an 
entirely  new  invention,  much  to  the  credit  of  the  Liberal 
Party,  and  particularly,  of  Mr.  Fielding,  the  Finance  Min- 
ister. 

This  preference  section  provided  that  when  the  customs 

tariff  of  any  country  admitted  the  products  of  Canada  on 

terms  as  favorable  on  the  whole  as  those  of  the  Canadian 

reciprocal  tariff  ^  articles,  the  growth,  produce,  or  manu- 

1  Set  forth  in  Schedule  D  of  the  Customs  Tariff  Act. 


VARIOUS  FEATURES  OF  LEGISLATION        163 

facture  of  such  country,  when  imported  direct,  might  enter 
Canada  at  reduced  rates.  Schedule  D  provided  that  on 
such  goods  the  duties  should  be,  on  and  after  April  23, 1897, 
until  June  30,  1898,  seven  eighths  of  the  duty  mentioned 
in  Schedule  A,  and  on  and  after  July  1,  1898,  three  quar- 
ters of  the  duty  mentioned  in  Schedule  A.^  This  applied 
particularly  to  the  products  of  Great  Britain.  In  1898  it 
was  explicitly  provided  that  the  articles  of  certain  countries, 
especially  the  United  Kingdom,  Bermuda,  the  British  West 
Indies,  and  British  Guiana,  when  imported  direct,  should  be 
entered  at  three  quarters  of  the  duties  mentioned  in  Sched- 
ule A,  provided  that  the  articles  admitted  were  bona  fide 
manufactures  of  such  country. ^  In  1900  the  preference  was 
raised  to  one  third  of  the  duties  set  forth  in  Schedule  A.^ 

In  1906  the  British  preference  was  made  even  more  ex- 
plicit, inasmuch  as  definite  rates  of  duty  were  imposed  on 
individual  articles.  In  the  adoption  of  multiples  of  2| 
per  cent,  as  15,  17^,  or  20  per  cent,  the  lower  rate  was  al- 
ways taken.  If,  for  instance,  the  33|  per  cent  reduction 
provided  for  a  duty  between  15  and  17|  per  cent,  the  ar- 
ticle was  taxed  15  per  cent.  Thus,  the  revision  of  1907 
tended  to  favor  the  British  exporter  even  more  than  before. 
To  be  admitted  under  this  tariff,  it  was  also  provided  that 
a  substantial  part  of  the  value  of  the  manufactured  article 
must  have  been  produced  by  labor  in  one  or  more  of  the 
above-mentioned  countries.^ 

Many  have  claimed  that  the  value  of  the  preference  to 
British  manufacturers  has  been  small.  The  duties  on  iron 
and  steel,  especially  on  the  primary  products,  on  which 
bounties  have  been  paid,  were  greatly  reduced  in  1896,  and 
the  actual  preference  was  not  very  great,  since  the  prefer- 
ential rates  were  estimated  on  the  basis  of  the  low  rates 
in  the  general  tariff.  Of  course  there  can  be  no  preference 
on  free  goods.  One  third  of  $2.50  for  pig  iron,  or  $2  for 

1  60-61  Vic,  1897,  chap.  16.      2  61  Vic,  1897,  chap.  37. 

»  6a-64  Vic,  1899,  chap.  15.      *   6-7  Ed.  VII,  1906-07,  chap.  11. 


164    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

steel  billets,  is  a  small  preference.  Under  existing  circum- 
stances British  manufacturers  have  been  unable  to  grasp  the 
surplus  Canadian  market  because  they  have  been  greatly 
hampered  by  American  competition.  In  spite  of  this,  many 
Canadian  manufacturers  claim  that  the  British  preference 
rates  are  an  insuflScient  ^  protection  and  are  anxious  to 
have  the  preference  abolished.^ 

It  was  hoped  that  the  preference  would  stimulate  im- 
portation from  Great  Britain,  or  that  British  merchants 
would  be  able  to  get  and  keep  a  larger  share  of  the  trade 
supplied  by  Canada's  imports,  especially  imports  of  iron 
and  steel.  Imports  of  dutiable  iron  and  steel  goods  aver- 
aged slightly  over  $3,000,000  from  Great  Britain  and  about 
$3,300,000  from  the  United  States  for  the  years  1876  to 
1880.  In  the  later  eighties  annual  imports  from  Great  Bri- 
tain exceeded  those  from  the  United  States  by  about  $200,- 
000,  but  the  first  seven  years  of  the  nineties  saw  a  rapid 
advance  in  the  excess  of  imports  from  the  United  States 
over  those  from  Great  Britain,  resulting  largely  from  a  de- 
cline in  the  imports  from  Great  Britain,  although  partly 
from  an  increase  in  imports  from  the  United  States. 

The  preference  was  expected  to  change  this  situation, 
but  it  failed  to  accomplish  its  purpose.  For  the  period  1895 
to  1899  imports  of  dutiable  iron  and  steel  goods  from 
Great  Britain  averaged  annually  about  $2,100,000,  as  com- 
pared with  an  average  of  $8,000,000  from  the  United 
States.  Dutiable  imports  from  the  United  States  exceeded 
those  from  Great  Britain  by  about  $11,000,000  in  1899. 
Since  1899,  when  the  preference  was  increased,  the  excess 
of  dutiable  goods  from  the  United  States  has  increased 
regularly.  The  British  proportion  of  total  imports  of  duti- 
able goods  decreased,  from  an  average  of  about  18  per  cent 
for  the  years  1899  to  1910,  to  12  per  cent  for  the  period 
1911  to  1913.3 

^  Monetary  Times,  vol.  XL,  p.  840.  *  Iron  Age,  vol.  LXX,  p.  20. 

'  See  Appendix  G,  Table  II. 


VARIOUS  FEATURES  OF  LEGISLATION        165 

It  is  more  difficult  to  determine  what  part  of  the  im- 
ports from  Great  Britain  would  have  been  impossible  with- 
out the  preference.  The  greater  part  of  the  British  imports 
is  composed  of  free  goods,  and  those  articles  on  which  the 
general  duties  are  low  and  on  which  bounties  have  been 
paid.  On  the  average  about  half  of  the  free  goods  have 
come  from  Great  Britain.  Whereas,  in  1913,  one  tenth  of 
the  dutiable  goods  came  from  Great  Britain,  nearly  one 
third  of  the  free  goods  were  of  British  origin.  Pig  iron,  on 
which  the  preference  is  only  $1  per  ton,  has  been  imported 
from  England  in  values  amounting  to  $376,313  in  1909,  and 
$2,032,608  in  1908,  as  compared  with  imports  of  $491,529 
and  $1,429,946  from  the  United  States  for  the  same  years. 
Pig  iron,  which  makes  good  ballast  for  transatlantic  ships, 
can  be  carried  at  very  low  rates.  The  next  largest  item  is 
galvanized  iron  sheets,  on  which  the  preference  is  5  per 
cent.  Imports  to  the  value  of  $1,389,343  were  received  in 
1912.  Iron  and  steel  rails,  on  which  the  preference  amounts 
to  $2.50  per  ton,  have  not  been  largely  imported  from 
Great  Britain,^  Yet,  Mr.  James  Farrell,  president  of  the 
United  States  Steel  Corporation,  claims  that  the  preference 
cuts  well  into  the  profits  on  rails  sold  in  Canada.^ 

Imports  from  the  United  States  have  taken  the  form  of 
bar  iron  and  steel,  angles,  beams,  rails,  skelp  iron  and  steel, 
plates,  and  wire :  —  articles  on  which  the  duties  are  rela- 
tively high  and  the  preference  large.  The  actual  amount  of 
importation  depends  in  part  on  the  character  of  the  ar- 
ticles and  the  freight  charges  paid  on  them.  Since  struc- 
tural material,  rails,  etc.,  can  be  carried  cheaply  by  rail, 
American  producers  secure  the  larger  part  of  the  trade. 
Specialization  in  certain  branches  has  undoubtedly  fa- 
vored the  importation  of  many  American  iron  and  steel 
products. 

While  the  American  industry  has  prospered  and  devel- 

»  Canada  Year-Book,  1912,  p.  183. 
2  Monetary  Times,  vol.  Li,  p.  534. 


166    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

oped  during  the  last  twenty  years,  Great  Britain  has  been 
trying  to  learn  the  cause  of  her  loss  of  supremacy.  Both 
the  United  States  and  Germany  lead  Great  Britain  in  the 
production  of  i)ig  iron.  The  United  States  leads  the  world 
in  plant  organization  and  in  the  use  of  machinery  on  a 
large  scale.  Consequently,  the  preference  has  been  less 
valuable  to  the  British  producer  than  it  might  have  been 
had  British  superiority  in  iron  and  steel  production  con- 
tinued down  to  date. 

The  value  of  the  preference  to  Canadian  consumers  of 
iron  and  steel  is  a  different,  yet  related,  question.  British 
iron  goods  that  do  not  compete  with  either  American  or 
Canadian  made  goods  (a  very  small  volume)  may  cost  the 
consumer  less  than  they  would  otherwise.  Even  if  the 
British  producer  is  in  a  strategic  position,  he  can  afford  to 
sell  a  larger  quantity  of  goods  at  a  somewhat  lower  price. 
The  preference  on  goods  that  must  compete  with  Canadian 
or  American  products  is  more  apt  to  be  effective.  In  such 
cases  as  these,  much  depends  on  the  standing  of  the  Bri- 
tish producer.  If  he  is  as  efficient  as  his  competitors  else- 
where, he  will  export  to  Canada  at  a  price  lower  than  the 
Canadian  consumer  would  otherwise  have  to  pay,  and  the 
consumer  will  benefit  to  the  extent  of  the  preference  on  his 
total  consumption.  If  the  preference  simply  neutralizes 
British  disadvantages,  the  British  producer  will  absorb 
the  preference  to  such  extent  as  he  can  gain  the  Canadian 
market.  The  Canadian  consumer  does  not  gain  in  situa- 
tions like  these  and  the  Canadian  or  American  producer 
loses  that  portion  of  the  market  that  the  British  producers 
are  able  to  seize.  The  Canadian  consumer  benefits  not  so 
much  from  the  actual  amount  of  British  goods  imported 
as  by  the  fact  that  the  possibility  of  obtaining  a  supply  in 
Great  Britain  forces  domestic  and  American  producers  to 
reduce  prices  to  meet  the  possible  or  actual  importation  of 
British  goods  under  the  preference.  Actual  importation 
of  a  considerable  value  of  British  goods  is  evidence  that 


VARIOUS  FEATURES   OF  LEGISLATION         167 

the  force  of  competition  is  in  operation.  In  no  case  can  the 
preference  increase  the  cost  of  iron  and  steel  goods  to  con- 
sumers. The  Canadian  producer  loses  in  so  far  as  he  fails 
to  hold  the  Canadian  market,  and  he  loses  still  more  when 
the  sale  price  to  the  consumer  is  reduced.  The  consumer 
gains,  not  only  on  British  imports,  but  also  on  domestic 
and  other  foreign  products. 

§  2.  The  internal  difficulties  with  the  iron  and  steel 
schedule  were  really  at  the  basis  of  the  revisions  of  1897 
and  1907,  especially  that  of  1897.  It  is  just  this  feature  in 
the  protective  system  that  gives  most  difficulty,  and  in 
some  cases  secures  the  support  of  manufacturing  interests 
for  what  may  appear  to  be  a  downward  revision  of  the 
tariff.  Indeed,  the  addition  to  the  free  list  of  articles  not 
produced  in  the  country  may  be  regarded  as  a  logical  fea- 
ture of  the  protective  system.  In  a  scheme  of  this  kind, 
however,  the  protective  system  could  not  be  logically 
worked  out  in  all  its  phases;  since  the  entry  of  the  raw 
materials  of  certain  manufacturing  interests  free  of  duty 
is  a  contradiction  of  the  principle  of  encouraging  infant 
industries. 

At  all  events,  the  principle  of  admitting  the  raw  mate- 
rials of  certain  manufactures  at  low  rates  of  duty  has 
been  fully  worked  out  in  Canada  since  1896.  This  ap- 
peared in  the  revision  of  1897  in  the  form  of  the  reduction 
of  the  rates  of  duty  on  pig  iron  and  steel,  the  raw  mate- 
rials of  a  large  body  of  manufacturing  interests;  and  also 
in  the  admission  of  certain  articles  free  of  duty,  when 
used  in  Canadian  factories  in  the  manufacture  of  certain 
products.  In  a  more  special  form,  the  principle  was  em- 
bodied in  what  has  been  called  the  drawback  system,  by 
which  duties  on  specified  commodities  imported  and  used 
in  the  manufacture  of  certain  articles  were  almost  wholly 
rebated  to  the  importer  of  such  raw  materials. 

In  1907  rolled  iron  and  steel  and  pig  iron,  when  used  in 


168    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  manufacture  of  agricultural  implements  to  be  e3q)orted 
from  Canada;  steel  under  one-half  inch  in  diameter  or 
under  one-half  inch  square,  when  used  in  the  manufacture 
of  locks  and  knobs;  steel,  cut  to  shape,  when  used  in  the 
manufacture  of  spoons;  flat  spring  steel,  steel  billets,  and 
steel  axle  bars  used  in  the  manufacture  of  springs  and  axles, 
other  than  for  railway  and  tramway  vehicles;  spiral  spring 
steel  used  in  the  manufacture  of  railway  spiral  springs; 
steel  used  in  the  manufacture  of  cutlery,  files,  augers,  bits, 
braces,  hammers,  axes,  hatchets,  scythes,  reaping  hooks, 
hoes,  hay  and  straw  knives,  agricultural  forks,  rakes,  skates, 
stove  trimmings,  bicycle  chains,  and  windmills;  rolled 
angles  of  iron  and  steel  of  specified  size  used  in  the  manu- 
facture of  bedsteads,  lap-welded  tubing,  and  bituminous 
coal  imported  by  proprietors  of  smelting  works  and  con- 
verted into  coke  for  the  smelting  of  ores,  were  given  draw- 
backs of  99  per  cent  of  the  duty  paid.^  In  1914  the  Con- 
servative Government  provided  for  a  drawback  of  99  per 
cent  of  the  duty  on  wire  rods  to  be  used  in  the  manufacture 
of  galvanized  iron  and  steel  wire,  numbers  9,  12,  and  13, 
and  on  charcoal  for  use  in  smelting  metals.^ 

It  has  generally  been  argued  that  these  rebates  are 
detrimental  to  the  Canadian  iron  industry,  especially  in 
times  of  depression.  Canadian  material  cannot  be  used 
unless  it  is  marketed  at  rates  low  enough  to  meet  foreign 
competitors  in  the  open  market.^  A  claim  has  been  made 
that  scores  of  orders  for  Canadian  iron  were  canceled  in 
1906,*  and  that  these  rebates  accounted  for  a  good  share 
of  the  imports  of  iron  and  steel  products.*  The  iron  and 
steel  men  held  that  15  to  20  per  cent  of  the  iron  and  steel 
products  would  be  displaced  by  American  and  British  iron.^ 

1  6-7  Ed.  VII,  1906-07,  chap.  11,  Schedule  B. 
'^  Canadian  Mining  Review,  vol.  xlv,  1893,  p.  4. 
^  Department  of  Customs,  Memorandum,  Tariff  Changes  in  Effect, 
April  7,  1914. 

*  Iron  Age,  vol.  Lxxviii,  p.  1632. 

^  Hardware  and  Metal,  vol.  xxii,  Jan.  8,  p.  29. 

8  Iron  Age,  vol.  lxxviii,  p.  1632. 


VARIOUS  FEATURES  OF  LEGISLATION        169 

An  interesting  feature  appeared  in  1900  when  the  Ameri- 
can iron  tubing  firms  were  dumping  their  surplus  product 
into  Canada.  Imports  from  the  States  had  been  heavy  for 
some  time  and  low  prices  prevailed.  The  Canadian  produc- 
ers solved  the  difficulty  by  buying  up  the  pipe  offered  at  sac- 
rifice prices,  by  turning  a  different  thread  on  American 
pipes,  and  by  exporting  the  piping  to  Great  Britain.  Thus, 
the  99  per  cent  drawback  on  the  exported  product  was 
earned,  and  at  the  same  time  a  nice  profit  was  made  on  the 
British  sales,  and  the  price  in  the  home  market  maintained.^ 

The  discussion  of  this  drawback  system  is  interesting  and 
important.  A  memorial  presented  by  the  Canadian  iron 
and  steel  interests  in  November,  1911,  to  Mr.  White,  the 
Minister  of  Finance,  contains  the  following  statements  in 
respect  to  imports  for  the  fiscal  year  ending  March  31, 
1911:  "Of  imports  of  pig  iron  amounting  to  270,102  tons 
valued  at  $3,613,931,  151,349  tons  valued  at  $2,084,729, 
came  from  the  United  States.  It  is  estimated  that  nearly 
one  half  of  the  quantity  imported  from  the  United  States 
was  used  in  the  manufacture  of  articles,  which  under 
Schedule  B  of  the  Customs  Tariff,  obtained  a  rebate  of  99 
per  cent  of  the  duty."  "Of  imports  of  bar  iron  or  steel 
amounting  to  104,895  tons,  valued  at  $3,179,921,  84,650 
tons  valued  at  $2,533,747  came  from  the  United  States, 
quite  one  half  of  which,  having  been  used  in  the  manu- 
facture of  articles  named  in  Schedule  B,  obtained  a  rebate 
of  99  per  cent  of  the  duty."  ^  These  statements  were  the 
basis  of  a  very  definite  claim  for  higher  duties.  The  draw- 
backs were  discussed  again  in  1913.  It  has  been  claimed 
that  the  exporting  manufacturers  find  it  impracticable  to 
keep  foreign  and  domestic  pig  iron  separate,  so  only  foreign 
pig  iron  is  used  in  the  article  exported,  and  domestic  pig 
iron  in  the  article  for  home  consumption.  A  manufacturer 
of  agricultural  implements  might  import  10,000  tons  of 
pig  iron  and  use  20,000  tons  of  domestic  iron.  On  exporting 

^  Iron  Age,  vol.  lx%t[,  Dec.  27,  p.  15.  *  See  Appendix  J. 


170    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

10,000  tons  of  implements,  he  would  receive  a  drawback  of 
the  duty  on  one  third  of  the  10,000  tons  imported,  instead 
of  all  the  duty,  as  was  intended.  Consequently,  the  manu- 
facturers have  got  into  the  habit  of  buying  nearly  all  their 
pig  iron  abroad,  and  the  pig  iron  industry  has  suffered. 
For  this  reason,  the  wording  of  the  Customs  Act  has  been 
changed  to  provide  that  drawbacks  shall  be  payable  on  all 
pig  iron,  imported  and  used  by  the  manufacturer  in  the 
production  of  certain  goods,  in  the  proportion  of  the 
amount  exported  to  the  total  amount  produced.^ 

Canadian  iron  and  steel  interests  can  hardly  object  to 
this  form  of  tariff  reduction.  When  the  manufacturers  of 
agricultural  implements  have  to  bear  the  burden  of  most  of 
the  adverse  criticism  of  protection  in  order  that  other  man- 
ufacturers may  retain  their  protection,  it  is  only  fair  that 
they  should  be  able  to  secure  their  raw  materials  as  cheaply 
as  possible.  The  iron  and  steel  industry  was  favored  by  the 
same  principle  in  1907  when  coal  employed  for  making  coke 
to  be  used  for  smelting  ores  was  admitted  to  the  99  per 
cent  rebate  list.  Manufacturers  would  have  us  believe  that 
the  basis  on  which  to  judge  the  tariff  policy  of  a  country  is 
the  interest  of  each  particular  group.  But  commercial 
policies  are  not  so  simple.  The  drawback  system  is  only 
additional  evidence  of  the  diflficulties  that  arise  from  the 
necessarily  illogical  application  of  the  protective  principle. 
The  revision  of  1914  has,  however,  given  the  Canadian 
producers  of  pig  iron  a  better  opportunity  to  share  in  the 
Canadian  market. 

§  3.  If  tariff  reductions,  the  British  preference,  and  the 
drawback  system  did  represent  a  loss  to  the  producers  of 
primary  products,  measures  other  than  Federal  offered 
some  compensation.  For  instance,  in  1895,  municipal 
bonuses  had  been  given  in  favor  of  the  estabhshment  of 

1  Debates,  1914,  pp.  25,  46-50;  Memorandum  of  Department  of  Cus- 
toms, April  7. 


VARIOUS  FEATURES  OF  LEGISLATION        171 

the  iron  and  steel  plant  at  Hamilton.  When,  in  1900,  the 
Canada  Iron  Furnace  Company  installed  its  furnace  at 
Midland,  the  municipality  gave  a  bonus  of  $50,000  and 
exemption  from  all  but  nominal  municipal  taxation.^  In 
1902  North  Sydney  offered  the  Nova  Scotia  Steel  Company 
a  bonus  of  $50,000  and  exemption  from  local  taxation  for 
20  years.2  In  1906  Belleville  attracted  the  ill-fated  Abbot 
Iron  Works  by  a  liberal  municipal  subsidy.  Sydney  was 
considering  in  the  same  year  a  proposal  to  establish  there 
an  industry  to  manufacture  bar  steel,  angle  bars,  etc.  The 
to^vTi  was  requested  to  give  a  bonus  of  $50,000  in  4|  per 
cent,  30-year  city  bonds,  a  20-year  tax  exemption,  and 
water  at  a  maximum  rate  of  3  cents  per  1000  gallons.  It 
offered  $30,000  and  a  20-year  tax  exemption.  St.  John 
offered  $50,000,  and  a  20-year  tax  exemption,  free  water, 
free  site,  and  a  $25,000  subscription  to  capital,  —  and  got 
the  industry.  Port  Arthur  is  practically  a  partner  of  the 
Atikokan  Iron  Company,  by  virtue  of  stock  subscriptions, 
bond  purchases,  guaranties,  free  site,  and  tax  Hmitations.' 
The  Dominion  Iron  and  Steel  Company  received  from  Syd- 
ney adequate  support  in  the  form  of  bonuses,  free  site, 
and  tax  exemptions.  In  1904  ColHngwood  gave  as  much 
as  $60,000  to  the  Cramp  Steel  Company,*  which  subse- 
quently failed. 

This  is,  of  course,  simply  a  part  of  the  general  municipal 
subsidizing  of  industries,  a  prevalent  e\'il  among  Canadian 
municipalities.  The  companies  are  aware  of  the  situation 
and  virtually  hold  up  the  towns  and  smaller  cities  for  sup- 
port, threatening  otherwise  to  build  at  some  rival  city.  The 
iron  and  steel  industry  has  shared  the  fruits  along  with  the 
rest.  The  policy  has  little  or  no  direct  influence  in  the  de- 
velopment of  industry.  Even  the  location  of  an  industry  is 
frequently  determined  by  quite  different  and  more  funda- 

*  E.  Porritt,  The  Revolt  in  Canada,  p.  116. 

2  Monetary  Times,  vol.  xxxv,  p.  842. 

»  Iron  Age,  vol.  Lxxviii,  p.  1257.  *  4  Ed.  VII,  1904,  chap.  44. 


172    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

mental  considerations,  such  as  the  existence  of  transporta- 
tion facilities  and  proximity  to  the  market. 

§  4.  The  Provinces  also  have  taken  a  hand  in  encourag- 
ing the  development  of  the  iron  and  steel  industry.  In 
1897  Ontario  passed  an  act  to  encourage  the  manufacture 
of  railway  iron  and  steel  by  providing  that  Ontario  might 
deliver  to  the  companies,  in  lieu  of  a  cash  subsidy,  railway 
iron  or  steel  manufactured  in  Ontario  from  iron  ore  of 
which  two  thirds  had  been  obtained  from  Ontario  mines. 
It  was  also  provided  that  subsidies  granted  to  certain  rail- 
ways should  be  subject  to  the  further  condition  that  the 
companies  should  so  far  as  practicable  construct,  equip, 
and  operate  their  lines  of  railway  with  railway  supplies 
and  rolling  stock  of  Canadian  manufacture,  whenever  such 
supplies  could  be  procured  as  cheaply  and  upon  as  good 
terms  in  Canada  as  elsewhere.^  Ontario's  Iron  Mining 
Fund  was  completely  exhausted  by  1904,  and  as  no  pro- 
vision was  made  for  its  extension,  it  is  now  a  thing  of  the 
past.^  Ontario  also  passed  laws  providing  that  munici- 
palities might  subsidize  iron  and  other  smelting  works, 
rolling  mills,  and  ironworks  within  or  adjacent  to  the  limits 
of  the  municipality  or  exempt  them  from  taxation  for  a 
period  not  longer  than  twenty  years.^  After  the  collapse 
of  the  ConsoUdated  Lake  Superior  Company  in  1903,  the 
Ontario  Government  undertook  to  guarantee  the  payment 
of  wages  due  the  employees,  including  high-salaried  offi- 
cials. Payment  was  made  from  local  banks  under  the  guar- 
anty of  the  Government,  which  held  security  for  the  repay- 
ment in  an  already  earned  but  not  conveyed  land  subsidy 
to  the  Algoma  Central  Railway,  one  of  the  subsidia- 
ries.'* In  1904  an  act  was  passed  to  give  a  railway  bonus  to 

1  60  Vic,  1897,  chap.  40. 

^  Ontario,  Report  of  the  Bureau  of  Mines,  1908,  p.  194. 

3  63  Vic,  1899,  chap.  33,  sec  44. 

4  Canadian  Annual  Remew,  1904,  p.  2689;  4  Ed.  VII,  1904,  chap.  191. 


VARIOUS  FEATURES  OF  LEGISLATION        173 

the  Grand  Trunk  Pacific,  if  the  rails  used  in  the  Ontario 
section  were  produced  in  Ontario,  or,  if  they  were  not  ob- 
tainable in  Ontario,  in  some  other  Canadian  Province.^ 

Nor  was  Nova  Scotia  less  generous,  especially  in  regard 
to  the  Dominion  Iron  and  Steel  Company.  In  1899  the 
promoters  of  the  company  secured  a  charter  by  which  the 
company  was  given  the  right  of  eminent  domain,  and 
given  the  power  to  pay  dividends  on  preferred  stock  while 
the  plant  at  Sydney  was  under  construction,  and  it  was 
freed  from  all  provincial  and  county  taxation.  The  law  of 
Nova  Scotia  was  relaxed  to  make  it  l^al  for  non-British 
subjects  to  become  directors.  A  law  was  passed  to  the 
effect  that  a  director  should  not  be  disqualified  from  con- 
tracting with  the  company,  so  that  the  promoters  of  the 
Dominion  Iron  and  Steel  Company  could  make  contracts 
with  the  Dominion  Coal  Company  for  its  fuel;  and  finally, 
the  city  of  Sydney  was  given  power  to  grant  a  bonus  and 
free  the  plant  from  municipal  taxation. 

In  the  same  year  the  Mining  Code  was  amended  to  pro- 
vide that  the  royalty  payable  to  the  Provincial  Treasury 
on  all  coal  mined  and  used  in  the  manufacture  of  iron  and 
steel  in  Nova  Scotia,  or  by  steamers  owned  or  chartered  by 
the  company  for  conveyance  of  ores  or  the  products  of  the 
plant,  should  be  6j  cents,  instead  of  12^  cents,  per  ton, 
which  was  the  royalty  paid  on  coal  mined  for  export  or  for 
other  domestic  purposes. 

§  5.  The  Federal  Government,  too,  had  recourse  to  other 
forms  of  assistance.  In  1900  Mr.  Clei^e,  of  the  Algoma 
Steel  Company,  urged  on  the  Government  an  amendment 
of  the  Railway  Code  that  would  call  for  the  use  of  equip- 
ment made  in  Canada  on  railways  to  which  Dominion  sub- 
sidies were  paid.^  As  a  result  the  Railway  Act  was  amended 

1  4  Ed.  VII,  1904,  chap.  18,  sees.  5  and  9. 

^  Montreal  Star,  April  27, 1910;  E.  Porritt,  Sixty  Years  of  Protection  in 
Canada,  p.  399. 


174    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

to  the  effect  that  when  the  Dominion  subsidies  were  be- 
stowed on  a  railway  undertaking,  the  company  should  lay 
its  road  wath  new  steel  rails  made  in  Canada,  if  the  same 
were  procurable  upon  terms  as  favorable  as  other  rails.  ^ 
This  is  a  lenient  regulation,  but  it  represents  the  attitude  of 
the  Government  toward  the  iron  and  steel  industry.  It 
has  also  been  claimed  that  iron  and  steel  shipped  over  the 
Intercolonial  Railway,^  has  been  charged  specially  low 
freight  rates,  and  that  the  Government  loses  $1  on  every 
ton  of  iron  and  steel  shipped  from  Sydney  to  Montreal.* 

§  6.  A  still  more  extraordinary  form  of  assistance  was 
given  in  1900.  The  Government  felt  restrained  by  its 
strong  free-trade  declarations  from  giving  more  protection 
in  the  form  of  duties.  But  one  month  before  the  election  of 
1900  the  Government  entered  into  a  large  contract  with 
the  Algoma  Steel  Company  for  125,000  tons  of  first  quality 
"nickel  steel"  rails,  25,000  to  be  taken  yearly  for  five  years. 
For  the  first  year  the  price  was  to  be  fixed  by  the  market 
price  in  England. 

This  "Clergue"  contract  was  severely  criticized  by  the 
Conservative  Opposition.  Since  nickel  steel  rails  were  not 
made  in  England,  regulation  of  the  price  according  to  the 
English  market  price  meant  nothing.  It  was  pointed  out 
that  no  tender  was  let  for  the  contract,  and  that  it  was 
impossible  to  estimate  actual  market  prices  from  journal 
prices.*  Furthermore,  the  price  might  be  fixed  for  one 
whole  year,  at  a  time  when  the  price  was  high,  and  the 
market  price  might  fall  soon  after,  as  it  did  in  1900,  from 
$35  to  $26  within  six  months.^  The  contract  was  not  gen- 
erally applicable  to  all  iron  and  steel  plants,  so  it  did  not 
foster  the  industry.^  The  government  was  already  paying 
bounties  of  $3  a  ton  on  steel  and  $3  a  ton  on  pig  iron.  These 

1  63-64  Vic,  1900,  chap.  58.  ^  Debates,  April  23,  1907. 

»  Ibid.,  April  27,  1907.  «  Ibid.,  1901,  pp.  2719-21. 

6  Ibid.,  p.  2740.  «  Ibid.,  p.  3571. 


VARIOUS  FEATURES  OF  LEGISLATION        175 

bounties,  plus  $7  a  ton  on  steel  rails,  were  no  doubt  a  good 
basis  on  which  to  raise  capital  and  capitalization.^  In  fact, 
Clergue  did  make  use  of  the  contract  to  help  raise  money. ^ 
Strangely  enough,  the  contract  did  not  exphcitly  provide 
for  the  manufacture  of  rails  in  Canada,^  and  it  did  not 
specify  the  quantity  of  nickel  to  be  contained  in  the  new 
nickel  steel  rails  to  be  provided  at  such  prices.* 

In  reply  to  these  criticisms,  Mr.  Blair,  IVIinister  of  Rail- 
ways, told  the  House  that  the  contract  had  been  made  to 
stimulate  another  stage  in  the  manufacture  of  iron  and 
steel.  Considering  the  statistics  of  railway  iron  imports, 
he  thought  it  well  worth  while  to  establish  a  rail  industry 
in  Canada.^  He  pointed  out,  in  addition,  that  a  domestic 
rail  mill  would  provide  for  quick  orders  for  rails,  which 
otherwise  would  have  to  be  purchased  from  abroad  at  pro- 
ducers' terms.^  Mr.  Blair  did  not  doubt  Mr.  Clergue's 
abiUty  to  carry  out  the  contract  on  time.^  English  quota- 
tions were  taken  for  the  price  of  rails  because  American 
quotations  would  otherwise  be  made  to  ruin  the  new  Cana- 
dian firm,  and  Mr.  Blair  thought  the  industry  should 
be  assured  that  it  need  not  face  unfair  and  destructive 
competition.^ 

But  it  was  June,  1904,  before  the  rail  mill  was  regularly 
in  operation  at  Sault  Ste,  Marie,  Ontario,  and  in  the  mean 
time,  the  Government  was  saved  over  $100,000  in  1901 
owing  to  Clergue's  inability  to  ship.^  Hence  the  rail  con- 
tract, while  it  did  assist  in  the  sky-rocket  financing  of  the 
Consolidated  Lake  Superior  Company,  was  no  great  bur- 
den to  the  Dominion. 

§  7.  A  more  definite  form  of  assistance  was  finally  given 
the  production  of  steel  rails.  In  1904  the  steel  rail  mills  of 
the  Algoma  Steel  Company  at  the  "Soo"  and  at  Sydney 

1  Debates,  1901,  p.  2721.  «  Ibid.,  p.  3637.  »  Ibid.,  p.  3588. 
*  Ibid.,  pp.  2631-33.  ^  Ibid.,  p.  3795.  «  Ibid.,  p.  3547. 
^  Ibid.,  p.  3546.        8  /^i^.,  p.  3546.      •  Ibid.,  p.  3791. 


,  176    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

were  put  in  operation,  and  in  the  mean  time  agitation  for 
some  form  of  protection  had  been  successful. 

Some  regarded  the  protection  of  the  steel  rail  industry  as 
almost  a  natural  consequence  of  the  liberal  assistance  given 
to  the  manufacture  of  primary  products.  It  was  held  that 
as  there  was  no  special  inducement  to  convert  the  raw 
material  into  finished  products  the  manufacturers  of  steel 
billets  were  being  forced  to  look  elsewhere  for  a  market. 
In  this  they  had  the  assistance  of  the  bounties,  which  were 
then  paid  on  iron  and  steel,  whether  the  products  into  which 
steel  was  manufactured  were  exported  or  consumed  at 
home.  Hence  they  sold  steel  billets  in  the  United  States, 
instead  of  making  them  into  rails  in  Canada.  At  the  same 
time  Canada  was  importing  all  of  her  steel  rails.  ^ 

One  strong  argument  for  protection  lay  in  the  fact  that 
the  United  States  Steel  Corporation  and  German  exporters 
were  dumping  steel  rails  in  Canada.  Mr.  Clergue,  of  the 
Consolidated  Lake  Superior  Company,  maintained  that 
the  German  market  was  protected  by  a  duty  of  $6  to  $7 
per  ton,  and  that  the  price  in  Germany  was  $30  to  $32  per 
ton.  The  freight  charges  to  Port  Arthur  were  $6  per  ton, 
and  yet  the  Canadian  Northern  Railway  had  purchased 
rails  laid  down  at  Port  Arthur  for  $27,  at  which  figure 
Clergue  could  not  produce.  He  said  it  was  for  this  reason 
that  the  rail  mills  had  been  closed  down  in  1902  before  they 
had  really  begun  operations.^ 

Mr.  Clergue  claimed,  too,  that  the  railroads  would  not 
be  injured  by  a  duty,  since  they  could  haul  their  own  rails 
when  produced  in  Canada,  and  would  be  indirectly  bene- 
fited by  the  industrial  development,  and  the  increase  of 
population  and  traffic.  Hence,  they  should  not  have  ob- 
jected to  a  reasonable  duty  on  rails. ^  There  is  some  truth 
in  this  view.    Probably  Canadian  railways  can  bear  the 

1  Iron  Age,  vol.  lxx,  Dec.  4,  p.  30. 

*  Canadian  Annual  Review,  1902,  p.  298. 

'  Industrial  Canada,  vol.  v,  p.  70. 


VARIOUS  FEATURES  OF  LEGISLATION.       177 

burden  of  protection,  without  passing  it  on,  better  than 
any  other  interest  in  Canada,  and  the  protection  of  iron 
and  steel  articles  used  by  railways  might  be  worthy  of  con- 
sideration. It  is  never  a  serious  matter  to  tax  such  natural 
monopolies.  The  most  difficult  task  is  to  get  the  legisla- 
tion passed. 

Finally,  it  was  pointed  out  that  there  was  scarcely  an- 
other product  into  which  Canadian  steel  was  turned,  on 
which  tariff  duties  were  not  higher  than  those  on  steel  rails, 
a  fact  which  made  the  manufacture  of  other  articles 
especially  profitable.  In  addition,  while  electric  railway 
rails  and  other  rails  weighing  less  than  45  poimds  per  yard 
were  dutiable  at  35  per  cent,  rails  for  steam  railways  were 
free.  But  since  electric  railway  rails  are  heavier  than  45 
pounds  per  yard,  this  arrangement  gave  an  opening  for 
fraud  in  the  importation  of  rails  for  use  on  street  railways. 
The  suggestion  was  that  all  rails  be  put  on  the  list  at  $7 
per  ton.' 

In  anticipation  of  the  operation  of  the  rail  mills  at  the 
"Soo"  and  at  Sydney,  Nova  Scotia,  an  act  was  passed  in 
October,  1903,  giving  the  Govemor-in-Council  power  to 
impose  a  duty  of  $7  a  ton  on  steel  rails,  when  it  was  satis- 
factorily shown  that  steel  rails  of  best  quality,  suitable  for 
use  in  Canadian  railways,  were  being  made  in  Canada  in 
sufficient  quantity  to  meet  the  ordinary  requirements  of  the 
market.^ 

This  was  a  disappointment  in  that  it  left  the  industry 
apparently  unprotected  at  its  most  critical  moment;  that 
is,  before  the  whole  market  could  be  supplied.  It  was  feared 
that,  uncertain  of  securing  the  duty,  the  manufacturers 
might  consider  it  less  risky  to  continue  selling  billets  than 
to  make  them  into  rails,  especially  when  at  that  time  bil- 
lets had  the  bounty  even  when  exported.^ 

For  a  year  after  this  law  had  been  passed  not  a  single 

1  Industrial  Canada,  vol.  ii,  p.  321.        •  3  Ed.  VII,  1903,  chap.  15. 
'  Iron  Age,  vol.  lxxi,  April  29,  p.  22. 


178    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

rail  was  made  in  Canada.  The  diflBculties  of  construction 
work  at  Sydney  were  great,  and  financial  conditions  at  the 
"Soo"  were  adverse.^  Nevertheless,  on  August  27,  1904, 
prior  to  the  election,  the  Government  passed  an  Order-in- 
Council  declaring  that  the  duty  should  go  into  effect  pro- 
viding that  shipments,  made  before  August  28,  passed 
through  the  customs,  and  laid  before  February  28,  1905, 
should  not  be  dutiable.^  Rails  bought  by  the  Government 
were  at  that  time  free  from  duty,  but  in  1906-07,  provision 
was  made  that  Government  purchases  should  no  longer  be 
exempt.' 

The  chief  objection  to  this  duty  has  come,  of  course,  from 
the  railways.  In  general,  it  may  be  said  that  the  construc- 
tion of  railways  has  been  of  such  paramount  importance 
that  it  should  not  have  been  restricted  by  the  backwardness 
of  any  particular  industry.  The  Canadian  Northern  had 
given  Mr.  Clergue  a  10,000  ton  order  for  rails  even  before 
the  duty  was  imposed,  but  2500  tons  had  been  delivered  in 
an  unsatisfactory  condition,  and  the  order  had  to  be  placed 
elsewhere.'*  To  impose  a  duty  on  steel  rails  when  the  Cana- 
dian Pacific  was  expanding  its  system,  the  Grand  Trunk 
issuing  new  securities,  and  the  Grand  Trunk  Pacific  and 
Canadian  Northern  projecting  transcontinental  railways 
was  a  policy  the  wisdom  of  which  was  doubtful.^ 

Since  1904  the  railways  have  been  opposed  to  the  duties, 
pointing  out  that  in  periods  of  depression  the  steel  com- 
panies have  been  able  to  keep  the  market,  and  that  in 
periods  of  active  railway-building  there  is  no  adequate 
supply  in  Canada.  At  no  time  previous  to  1907,  when  the 
open-hearth  and  Bessemer  converter  capacity  of  the  two 
plants  at  Sault  Ste.  Marie  and  Sydney  was  increased,  did 
the  output  of  the  two  mills  satisfy  the  demand.  Yet  within 

*  Iron  Age,  vol.  lxxiii.  May  26,  p.  14. 
2  Ihid.,  vol.  Lxxiv,  Oct.  27.  p.  38. 

s  6-7  Ed.  VII,  1906,  chap.  11. 

*  Iron  Age,  vol.  lxxiii,  Jan.  18,  p.  15. 
^  Ibid.,  vol.  Lxxi,  April  16,  p.  34. 


VARIOUS  FEATURES  OF  LEGISLATION        179 

a  month  after  the  mills  began  work  the  Government  was 
satisfied  that  steel  rails  were  being  made  in  suflScient 
quantity  to  meet  the  requirements  of  the  market,  and  an 
Order-in-Council  put  the  steel-rail  duty  into  operation.^ 
Since  1908  the  annual  production  has  averaged  about 
350,000  tons,  worth  about  $10,000,000.2  g^gei  j-ails  are 
still  imported,  nevertheless,  in  amounts  varying  from 
$750,000  to  $1,500,000  annually.^ 

The  actual  policy  in  respect  to  steel  rails  has  not  been  so 
inconsistent  from  the  protective  point  of  view  as  the  stat- 
utory statement  of  it.  Possibly  there  was  some  chance  of 
developing  an  infant  industry.  But  the  law  as  stated  actu- 
ally offered  protection  to  the  industry,  not  at  the  crucial 
moment,  but  when  rails  were  being  made  in  Canada  in 
quantities  suflBcient  to  supply  the  Canadian  demand.  It 
appears,  then,  that  the  Liberal  Party  had  completely 
abandoned  its  free-trade  views,  and  had  even  declared  it- 
self in  favor  of  a  policy  of  permanent  protection  for  fully 
developed  industries.  One  marvels  that  the  railways  ever 
permitted  the  Liberal  Party  so  far  to  forget  its  traditional 
policy. 

The  most  marked  effect  of  the  steel-rail  duty  is  that  the 
iron  and  steel  companies  have  been  able  to  market  steel 
rails,  especially  in  times  of  depression,  in  India  and  Australia 
in  competition  with  British,  German,  and  American  manu- 
facturers.* Doubtless,  the  contention  of  the  railroads  that 
the  companies  have  done  this  in  order  to  maintain  prices  in 
Canada  is  a  serious  matter.  But  the  practice  is  by  far  the 
most  relevant  feature  of  recent  Canadian  industrial  devel- 
opment, and  throws  a  good  deal  of  light  on  the  standing 
of  the  Canadian  iron  and  steel  industry.^  Until  the  panic 
of  1907  the  Canadian  steel -rail  mills  had  even  more  orders 

'  E.  Porritt,  Sixty  Years  of  Protection  in  Canada,  pp.  403-0-i. 

^  Production  of  Iron  and  Steel  in  Canada,  1912,  p.  24. 

^  See  Appendix  G. 

*  Iron  Age,  vol.  lxxxii,  p.  1083. 

^  E.  Porritt,  The  Revolt  in  Canada,  pp.  133-38. 


180    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

than  they  could  fill.  But  halfway  through  1908  there  was 
a  decrease  in  the  demand  for  rails,  and,  while  the  "Soo" 
mill  went  off  the  active  list  in  July,  the  Sydney  mill  rec- 
ognized that  it  was  impossible  to  secure  orders  at  home. 
To  keep  its  rail  mill  employed,  the  Sydney  firm  did  as  it 
had  done  before:  it  renewed  its  export  business,  and  not 
without  success.  In  September,  1908,  9000  tons  of  rails 
were  sold  to  a  railway  in  India;  in  November  18,000  tons 
were  shipped  to  New  South  Wales,  and  a  few  days  later  the 
announcement  was  made  that  several  orders  had  been 
secured  from  railways  in  Mexico.  In  1909  the  Great  North- 
ern Railway  Company  of  England  ordered  5000  tons  from 
the  Canadian  firm.^ 

Canada  rejoiced,  of  course,  that  a  Canadian  industry 
could  meet  foreign  competitors  in  a  world  market.  In  this 
connection  the  Dominion  Iron  and  Steel  Company  took  the 
people  of  Canada  into  its  confidence  to  a  remarkable  degree. 
The  extent  of  the  orders,  the  weight  per  yard  of  the  rails, 
orders  of  shipment,  and  the  pressure  of  the  overseas'  busi- 
ness on  the  rail  mill  were  all  emphasized.  The  exact  price, 
which  was  kept  a  secret  for  a  time,  was  supposed  to  be 
lower  than  that  at  which  rails  were  being  supplied  to  Ca- 
nadian railways.  Information  of  a  definite  character  was 
forthcoming  in  1909,  when  it  appeared  that  the  Dominion 
Iron  and  Steel  company  had  offered  to  supply  rails  for  the 
Transvaal,  at  a  price  about  75.  lower  than  an  English  quo- 
tation of  £6  25.  6^.,  that  is  at  about  $28  per  ton,  laid  down 
at  Delagoa  Bay,  South  Africa,  duty  paid.^ 

This  dumping  of  rails  was  variously  interpreted.  The 
company  defended  it  on  the  basis  of  keeping  the  men 
employed  (some  3000  hands)  ^  at  a  time  of  financial  strin- 
gency, when  the  "  Soo  "  mill  had  had  to  shut  down.  "  Indus- 
trial Canada,"  the  organ  of  the  Canadian  Manufacturers' 

1  Montreal  Witness,  April  30,  1909. 

2  Commercial  Intelligence,  July  28,  1909. 
*  Iron  Age,  vol.  Lxxxii,  p.  1456. 


VARIOUS  FEATURES  OF  LEGISLATION        181 

Association,  called  it  an  achievement  for  the  "National 
Policy,"  which  had  supposedly  put  the  Canadian  concern 
in  a  position  to  compete  with  the  world.  ^ 

Some  people  were  rudely  critical.  English  companies 
claimed  that  this  was  a  matter  to  be  taken  up  at  the  Im- 
perial Conference  of  1911.  Canadian  railways  urged  that 
it  was  a  system  of  dumping  abroad  to  keep  up  prices  at 
home.  The  abolition  of  the  bounty  system  was  advocated 
by  most  of  those  who  discussed  the  matter,  but  the  rail- 
ways suggeisted  the  logical  proposition;  namely,  that  if  the 
Dominion  Iron  and  Steel  Company  could  capture  foreign 
business  in  the  face  of  competition,  it  ought  to  be  able  to 
hold  its  own  at  home  without  assistance,  and  hence  that 
unless  equally  favorable  prices  were  offered  Canadian  con- 
sumers, the  duty  of  $7  a  ton  should  be  abolished,  or  at 
least  reduced. 2 

In  reply  to  criticism,  Mr.  Plummer,  the  president  of  the 
Dominion  Iron  and  Steel  Company,  said:  "We  consider 
our  plant  the  equal  of  any  in  the  world,  and  the  location  on 
tidewater  is  such  that  we  are  in  a  good  position  to  export. 
"We  feel  that  we  should  endeavor  to  get  our  share  of  the 
world's  market  and  have  every  intention  of  continuing  to 
do  so.  In  exporting  rails,  we  are  following  the  example  of 
others  in  selling  products  to  the  best  advantage.  Prices 
abroad  show  a  profit  quite  apart  from  the  Government 
bounty."  In  1908  the  general  manager  made  the  state- 
ment: "Orders  for  rails  are  coming  from  all  over  the  world. 
The  plant  is  in  a  position  to  furnish  steel  to  the  world's 
markets  at  $6  a  ton  less  than  Pittsburg."  ^  As  the  rail- 
ways contended,  the  frank  discussion  of  the  subject  by  the 
Dominion  Iron  and  Steel  interests  was  a  most  naive  ad- 
mission that  the  $7  duty  was  no  longer  necessary. 

^  Industrial  Canada,  December,  1908. 
*  Iron  Age,  vol.  lxxxii,  p.  1456. 
3  Montreal  Witness,  Dec.  14,  1908. 


182    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  8,  American  competition  has  recently  been  the  great- 
est danger  to  Canadian  industry,  and  the  dumping  of 
United  States  products  at  sacrifice  prices  in  Canadian 
markets  has  been  a  growing  menace.  Whenever  a  boom 
collapses,  American  iron  producers  cut  prices  in  foreign 
markets,  and  this  dumping  is  not  done  in  the  interests  of 
the  Canadian  consumer  of  iron  and  is  obviously  a  detri- 
ment to  Canadian  iron  and  steel  producers.^ 

In  1903  United  States  iron  and  steel  products  were  being 
dumped  at  low  prices  in  competition  with  Canadian  out- 
put.^ Since  it  was  a  time  of  depression,  this  dumping  fea- 
ture was  particularly  bad.  The  iron  and  steel  interests  had 
long  been  pressing  for  higher  duties,  but  the  Government 
hesitated  to  give  assistance  by  a  general  advance,  so  the 
dumping  clause  of  1904  was  introduced  to  provide  a  sys- 
tem of  countervailing  duties  on  all  such  dumped  goods.' 

The  Dumping  Act  provided  that  whenever  it  should  ap- 
pear to  the  satisfaction  of  the  Minister  of  Customs  or  any 
officer  of  customs  that  the  export  price  or  the  actual  selling 
price  to  the  importer  in  Canada  of  any  imported  dutiable 
article  of  a  class  or  kind  made  or  produced  in  Canada  was 
less  than  the  fair  market  value  thereof,  such  articles  should 
be  subject  to  a  special  customs  duty  equal  to  the  difference 
between  such  fair  market  value  and  such  selling  price,  in 
addition  to  the  duty  otherwise  established.  The  special 
duty  was  limited  to  one  half  of  the  customs  duty  otherwise 
established  on  most  articles,  and  to  15  per  cent  ad  valorem 
on  items  224,  226,  228,  231"  in  Schedule  A  of  the  Customs 
Tariff,  1897.  The  expression  "export  price"  was  defined 
as  the  exporter's  price  for  goods  exclusive  of  all  charges 
thereon  after  their  shipment  from  the  place  from  which 
they  would  be  exported  directly  to  Canada.  Provision  was 

^  Iron  Age,  vol.  lxxii,  Aug.  17,  p.  32. 

2  Ibid.,  vol.  Lxxiii,  March  3,  p.  18.  '  Ibid.,  June  16,  p.  29. 

*  Namely  pig  iron,  cast  scrap  iron,  iron  kentledge,  steel  ingot  blooms, 
slabs  and  billets,  puddled  bars,  rolled  iron  and  steel  angles,  etc.,  rolled 
iron  and  steel  plates. 


VARIOUS  FEATURES  OF  LEGISLATION        183 

made  for  meeting  evasion  of  the  special  duty  by  any  mode 
of  consignment;  for  the  making  of  regulations  deemed 
necessary  for  carrying  out  the  provisions  of  the  act,  in- 
cluding temporary  exemption  of  articles  not  made  in 
Canada  in  substantial  quantities,  and  offered  for  sale  to  all 
purchasers  on  equal  terms;  for  the  exemption  of  articles 
on  which  the  duty  was  equal  to  50  per  cent  ad  valorem,  and 
of  goods  the  export  price  of  which  was  only  slightly  imder 
the  fair  market  value,  as  well  as  goods  subject  to  an  ex- 
cise duty  in  Canada.  Rolled  round  wire  rods,  which  were 
free  of  duty,  were  excepted  from  the  exemption  of  free 
goods,  provided  that  the  special  duty  should  not  exceed 
15  per  cent.^ 

In  1907  the  Dumping  Act  was  made  applicable  to  all 
free  goods  under  the  general  law.  From  time  to  time  a  num- 
ber of  Orders-in-Council  and  regulations  have  been  passed. 
A  misunderstanding  as  to  whether  the  duty  applied  to 
goods  subject  to  specific  duties  was  definitely  ended  by  the 
inclusion  of  even  free  goods. ^  In  May,  1907,  exemption  was 
made  of  iron  and  steel,  rolled,  drawn,  or  polished,  when  the 
difference  between  the  fair  market  value  and  the  selling 
price  to  the  Canadian  importer  did  not  exceed  5  per  cent 
of  their  fair  market  value.  Other  goods  were  exempted 
where  the  difference  did  not  exceed  7^  per  cent.  It  was 
provided  that  the  whole  difference  should  be  taken  into 
account  for  special  duty  purposes  when  exceeding  5  per 
cent  in  the  case  of  such  iron  and  steel,  and  when  exceeding 
7^  per  cent  in  other  cases.  In  December,  1908,  it  was  pro- 
vided that  the  special  duty  should,  without  exemption 
allowance,  apply  to  galvanized  wire,  barbed  wire,  and 
round  rolled  wire  rods  of  iron  and  steel  of  a  class  and  kind 
made  in  Canada.  In  October,  1911,  the  Conservative  Ad- 
ministration ordered  that  the  duty  should  not  apply  to 
iron  and  steel  tubing,  when  the  difference  did  not  exceed  5 
per  cent  of  the  fair  market  value,  provided  that  the  whole 

1  4  Ed.  VII,  1904,  chap.  11.  ^6-7  Ed.  \1I,  1906,  chap.  11. 


184    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

difference  should  be  taken  into  account  for  special  duty 
purposes  when  exceeding  5  per  cent,  and  that  the  duty 
should  be  applied  without  exemption  to  tubing  over  4 
inches  and  not  exceeding  8  inches  in  diameter,  such  tubing 
being  of  a  kind  or  class  made  in  Canada. 

The  fair  market  price  has  been  estimated  on  the  usual 
credit  basis  except  when  an  article  is  universally  sold  in  the 
country  of  export  for  cash  only,  in  which  case  the  fair 
market  value  is  estimated  on  the  cash  basis,  provided  that 
a  bona  fide  discount  for  cash  not  exceeding  9,2  per  cent, 
when  allowed  and  deducted  by  the  exporter  on  his  in- 
voice, may  be  allowed  in  estimating  the  fair  market  value 
for  duty  purposes.^ 

This  new  method  of  protecting  Canadian  manufacturers 
has  been  severely  criticized.  Nearly  all  agree  that  it  is  hard 
to  tell  what  the  market  value  is,  when  so  many  prices  are 
quoted  for  different  purchasers  and  since  quoted  prices  are 
seldom  actual  prices.  The  iron  and  steel  interests  them- 
selves admit  that  often  the  clause  cannot  be  applied,  as 
American  furnaces  sometimes  sell  part  of  their  product  for 
delivery  to  distant  points  in  their  own  country  at  prices 
as  low  as  for  shipment  to  Canada.  This  is,  however,  neces- 
sitated by  competition.  American  furnaces  have  to  cut 
prices  for  certain  markets  to  meet  the  prices  of  independent 
companies  even  within  the  protected  market.  One  is  not 
surprised,  then,  that  the  export  price  is  low,  when  Ameri- 
can iron  has  to  meet  avowedly  efficient  Canadian  pro- 
ducers, protected  not  only  by  transportation  rates,  but 
especially  by  customs  duties,  and  formerly  even  by  boun- 
ties. The  British  preference  gives  a  special  reason  for  a 
differential  price  basis  if  the  American  producers  are  to 
sell  in  the  Canadian  market  at  all. 

After  all,  the  Dumping  Clause  seems  to  embody  a 
declaration  that  the  Canadian  industry  must  not  be  sub- 

1  Customs  Tariff  Act,  1907,  with  Appendix  (No.  6).  Aug.  10,  1912 
edition. 


VARIOUS  FEATURES  OF  LEGISLATION        185 

jected  to  external  competition.  Carried  to  its  practical 
and  logical  conclusion,  it  means  that  American  iron  can- 
not be  sold  to  Canadian  importers  at  less  than  the  price 
determined  by  the  United  States  Steel  Corporation  or 
other  American  producers.  If  the  Canadian  Dumping 
Clause  had  worked  as  was  intended,  the  Canadian  price 
would  necessarily  be  the  United  States  price,  plus  trans- 
portation charges,  as  well  as  the  Canadian  duties.  If  such 
were  the  case,  Canada  would  be  in  a  situation  worse  than 
the  United  States,  dominated,  as  it  is,  by  the  United  States 
Steel  Corporation.  It  is  a  strange  community,  indeed,  that 
can  accept  such  a  declaration  of  commercial  policy. 

One  is  not  surprised  that  the  Dumping  Clause  aroused 
considerable  discussion.  The  railways  complained  that 
they  were  deprived  of  an  opportunity  to  buy  rails  abroad 
at  greatly  reduced  prices.^  The  highly  specialized  iron  and 
steel  industries  were  especially  grieved  by  not  being  able 
to  buy  supplies  freely  in  the  United  States.  The  Canadian 
Bridge  Company,  for  instance,  located  at  Walkerville, 
Ontario,  a  convenient  place  to  secure  raw  materials  from 
Pittsburg,^  made  many  complaints.  The  application  of  the 
duty  to  tin  plate  in  1908  raised  such  objection  that  it  was 
repealed  in  1909.^  Some  feared  that  discriminations  in 
favor  of  importers  in  certain  sections  might  follow  the 
application  of  the  law.*  British  chambers  of  commerce 
complained,  almost  as  soon  as  the  clause  went  into  effect, 
of  the  onerous  and  complicated  arrangements  as  to  details 
in  invoices,  and  Canadian  importers  find  the  process  of 
making  entry  of  goods  an  interminable  burden.^ 

It  is  a  difiicult  matter  to  determine  to  what  extent  dump- 
ing has  actually  taken  place.  Government  documents  do 
not  state  how  often  the  special  or  dumping  duty  has  been 
applied  to  iron  and  steel  imports  entering  Canada,  or  how 

1  Financial  Post,  Feb.  27,  1909,  p.  15. 

^  Iron  Age,  vol.  Lxxvi,  p.  570.  '  Ibid.,  vol.  lxxxiv,  p.  338. 

*  Debates,  1904,  p.  8847.  »  Iron  Age,  vol.  lxxxiv,  p.  338. 


186    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

much  iron  and  steel  has  entered  under  the  duty;  but  the 
sum  of  $20,470.95  was  collected  as  special  duty  on  iron 
and  manufactures  of  iron,  steel  and  manufactures  of  steel, 
or  both  combined,  in  the  fiscal  year  ending  March  31, 
1912.1 

Hence,  we  have  to  turn  to  an  entirely  different  and  quite 
as  imsatisfactory  source  of  information.  The  Canadian 
iron  and  steel  firms  have  been  in  the  habit  of  presenting 
figures  to  show  that  the  price  of  iron  and  steel  at  Pittsburg 
for  home  consumption  is  frequently  higher  than  the  price 
of  goods  for  export  to  Canada.  An  unsigned  pamphlet, 
evidently  published  by  the  Canadian  iron  and  steel  inter- 
ests, gives  average  prices  for  foundry  pig  iron  at  Chicago, 
Buffalo,  Toronto,  and  Montreal,  for  the  years  1906  to  1911, 
to  show  that,  with  a  few  exceptions,  notably  1911,  the 
prices  of  pig  iron  were  higher  in  Canada  than  in  the  United 
States.  This  pamphlet  also  quotes  averages  of  high  and  low 
prices  for  the  period  in  order  to  prove  that  prices  have  been 
higher  in  the  United  States.  The  authors  have,  however, 
given  absolutely  no  consideration  to  the  possibility  that 
the  modal  monthly  or  yearly  price  might  support  an  alto- 
gether different  conclusion.  Besides,  no  reference  to  the 
source  of  the  information  is  given,  except  in  respect  to  the 
prices  of  steel  bars. 

As  a  matter  of  fact,  the  term  "dumping"  is  quite  gen- 
erally misunderstood.  The  Dominion  Iron  and  Steel  Com- 
pany declared  itself  a  competitor  in  the  world  market  — 
an  equal  of  any  producer  in  the  world.  In  1913  it  declared 
itself  ready  to  compete  in  the  Canadian  market  with  a 
Canadian  branch  of  the  United  States  Steel  Corporation; 
and  other  iron  and  steel  interests  have  declared  that  their 
plants  are  very  efficient.  If  American  producers  are  to 
market  any  part  of  their  product  in  Canada,  in  competi- 
tion with  such  efficient  producers,  they  must  pay  a  part  of 
the  duty,  and  possibly  all  of  the  railway  charges.  In  other 
,   *  Private  Correspondence,  Department  of  Customs,  Feb.  3,  1913. 


VARIOUS  FEATURES  OF  LEGISLATION        187 

words,  much  of  this  so-called  dumping  is  due  simply  to  the 
fact  that  American  producers  are  forced  to  bear  the  burden 
of  a  part  of  the  duty  paid  to  the  Canadian  Government  by 
reducing  the  prices  of  their  exported  product. 

§  9.  One  difficulty  in  determining  the  influence  of  pro- 
tection is  the  fact  that  such  a  policy  may  assume  different 
forms.  In  Canada  both  bounties  and  customs  duties  have 
been  given,  and  customs  duties  have  been  both  ad  valorem 
and  specific  or  mixed;  hence,  it  is  difficult  to  determine  the 
exact  amount  of  protection  granted  at  different  times  or  to 
different  articles. 

In  general,  one  may  say  that  the  recent  development  of 
the  Canadian  iron  and  steel  industry  has  taken  place  during 
a  period  of  lower  protection  than  existed  prior  to  1897.  Al- 
though the  Liberal  Party  has  been  accused  of  taking  over 
the  protective  policy  in  toto,  such  a  charge  does  not  seem  to 
be  valid,  at  least  so  far  as  the  iron  and  steel  schedule  is  con- 
cerned. On  most  finished  articles  the  duty  was  reduced 
in  1897  by  10  per  cent  of  the  duties  preNnously  imposed. 
Furthermore,  the  British  preference  provided  for  an  ad- 
ditional reduction  amounting  to  about  one-quarter  of  the 
general  duties  in  the  new  tariff.  In  1900  the  preference  was 
increased  to  one  third  of  the  duties  in  force,  and  in  1907,  the 
preferential  tariff  and  the  general  tariff  were  again  re- 
duced by  about  l|  per  cent  in  the  adoption  of  units  of  2^ 
per  cent.  The  application  of  a  duty  of  $7  per  ton  on  steel 
rails  weighing  over  45  pounds  per  yard  in  1903,  the  pay- 
ment of  bounties  on  wire  rods  between  1903  and  1911,  and 
on  rolled  angles,  tees,  plates,  etc.,  between  1903  and  1906, 
the  provision  of  duties  of  $3  per  ton  under  the  general 
tariff  and  $2  under  preferential  tariff  on  rolled  angles,  tees, 
plates,  etc.,  in  1906,  when  the  bounties  on  these  articles 
were  withdrawn,  the  pro\nsion  of  duties  on  wire  rods,  and 
the  advance  of  duties  on  heavier  structural  steel  in  1914, 
are  practically  the  only  exceptions  to  the  reduction  of  pro- 


188    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

tection  in  this  schedule  covering  a  large  number  of  items 
and  an  important  volume  of  imports. 

Although  the  duties  on  certain  articles,  especially  pig 
iron,  wrought  scrap  iron  and  steel,  steel  billets,  and  bars 
were  very  considerably  reduced  by  the  revision  of  1896,  the 
bounty  system  was  continued  and  extended  as  compensa- 
tion to  the  primary  industry.  Some,  believing  that  Ameri- 
can producers  with  their  dumping  policy  would  be  able  to 
nullify  the  efforts  of  tariff  duties,  thought  that  the  bounties 
would  prove  a  greater  assistance  to  the  Canadian  industry 
than  tariff  duties;  but  this  argument  does  not  appear 
sound.  The  United  States  Steel  Corporation  and  other 
American  producers  sell  at  cut  prices  to  meet  competition 
at  any  point,  whether  that  market  is  protected  by  a  duty 
or  whether  it  is  simply  a  competitive  point  within  the 
United  States  itself.  The  bounty  system,  by  offsetting  some 
of  the  costs  of  production  of  iron  and  steel  in  Canada,  has 
had  the  same  effect  on  the  so-called  dumping  of  American 
products  that  higher  tariff  duties  would  have  had.  The 
only  difference  in  the  two  forms  of  protection  lies  in  the 
changed  nature  of  the  competition.  Tariff  duties  might 
have  increased  the  cost  of  laying  down  American  products 
in  Canada;  the  bounties  have  necessitated  the  sale  of 
American  products  at  prices  low  enough  to  meet  the  price 
of  the  bounty-subsidized  Canadian  product.  The  preven- 
tion of  dumping  is  not,  therefore,  a  special  virtue  of  a 
bounty  system.  Indeed,  bounties  are  granted  precisely  in 
order  that  the  prices  of  goods  may  be  low  enough  to  meet 
any  possible  competition,  and  that  the  manufacturing  con- 
sumers may  have  the  benefit  of  cheap  raw  materials. 

As  a  matter  of  fact,  the  bounty  system  has  made  possi- 
ble the  gradual  reduction  of  the  total  amount  of  protection. 
For  instance,  we  find  that  the  bounties  on  pig  iron  made 
from  foreign  ore  scaled  down  from  $2  per  ton  in  1897  to 
$1.10  in  1906,  and  that  they  have  since  gradually  disap- 
peared. The  bounties  on  rolled,  round  wire  rods  were  an 


VARIOUS  FEATURES  OF  LEGISLATION        189 

exception  in  that  they  were  suddenly  cut  off  in  1911.  The 
substitution  of  specific  duties  in  1906  compensated  for  the 
abolition  of  the  bounties  on  manufactures  of  steel,  and 
protection  has  now  been  given  the  producers  of  wire  rods 
in  1914,  three  years  after  the  bounties  ended.  Considering, 
however,  that  the  duties  on  pig  iron,  bars,  and  billets,  as 
well  as  on  scrap  iron  and  steel,  were  large  before  1896,  the 
gradual  disappearance  of  the  compensatory  bounties  on 
these  primary  products  has  effected  an  important  reduction 
of  the  total  protection  previously  granted. 

In  short,  with  the  exception  of  a  few  items  there  has  been 
a  gradual  but  real  reduction  of  the  total  amount  of  protec- 
tion since  1897,  especially  that  in  favor  of  the  production 
of  primary  products.  That  this  was  a  period  during  which 
the  Canadian  iron  and  steel  industry  made  quite  unprec- 
edented progress  will  appear  from  the  historical  account 
of  its  development  to  which  we  now  turn. 


CHAPTER  IX 

THE   RECENT   HISTORY   OF   THE   INDUSTRY 

§  1.  Arguments  which  advocates  for  protection  advance 
in  favor  of  their  policy  cannot  be  accepted  without  criti- 
cism. In  defending  themselves  against  inevitable  criticism, 
those  politicians  who  establish  a  policy  usually  exaggerate 
the  merits  of  their  solution  of  a  problem  and  continue  their 
policy  once  it  has  been  adopted.  Moreover  criticism  of  the 
policy  is  apt  to  bear  the  flavor  of  partisan  interest.  Both 
criticism  and  advocacy  of  protection  are  likely  to  have 
purposes  but  little  related  to  the  general  welfare  of  the 
country. 

Some  of  the  arguments  for  protection  have  already  been 
fully  considered,  and  their  merits  have  been  weighed  so  far 
as  possible.  One  other  claim  in  favor  of  protection,  par- 
ticularly of  the  bounty  system,  has  been  put  forth  with 
vigor  and  conviction  during  recent  years.  That  the  Cana- 
dian iron  and  steel  industry  has  developed  in  a  remarkable 
way  during  the  twentieth  century  is  apparent  to  all  who 
have  followed  recent  Canadian  industrial  progress.  Most 
people  who  have  discussed  this  subject  have  simply  as- 
sumed that  the  Canadian  iron  and  steel  industry  was  the 
offspring  of  the  commercial  policy  of  the  period.  As  a 
matter  of  fact,  other  and  more  important  factors  have  con- 
tributed largely  to  this  significant  increase  of  output,  and 
the  growth  of  the  industry  is  not  necessarily  evidence  of  the 
success,  and  much  less  a  justification,  of  such  a  policy. 

We  must,  of  course,  thoroughly  understand  the  develop- 
ment of  the  industry  in  order  to  come  to  a  scientific  con- 
clusion as  to  the  effect  of  the  tariff  and  bounty  system  on 
that  development,  or  to  estimate  the  wisdom  of  the  sys- 
tem itself.   The  subject  of  this  chapter  is  a  review  of  the 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    191 

progress  of  the  industry  during  the  period  from  1896  to 
1914,  and  its  chief  purpose  is  to  ascertain  those  factors  that 
have  most  affected  the  course  of  events.  The  "how"  and 
the  "why"  of  the  progress  is  the  important  consideration 
that  needs  to  be  judged  with  an  open  mind  after  weighing 
the  facts.  What  part  the  tariff  and  bounty  system  has 
played  will  be  given  special  attention. 

§  2.  Undoubtedly,  the  Canadian  iron  and  steel  industry 
has  made  wonderful  strides  in  its  various  phases  during 
recent  years.  The  number  of  plants  and  blast  furnaces, 
the  capacity,  and  the  output  increased  greatly  between  1896 
and  1914,  In  1896  only  six  furnaces  produced  pig  iron 
in  Canada.  The  furnace  at  Hamilton,  Ontario,  had  a  capac- 
ity of  200  tons  daily;  the  one  at  Londonderry,  100  tons; 
that  at  Radnor  Forges,  25  tons;  two  at  Drummondville, 
7  and  8  tons;  and  the  Ferrona  furnace  had  a  capacity  of 
125  tons.^  In  1911  the  Dominion  Steel  Corporation  had 
four  completed  furnaces  each  of  280  tons'  capacity  per 
day.  This  corporation  built  two  more  of  the  same  size  in 
1912.  The  Nova  Scotia  Steel  and  Coal  Company  operated 
at  Sydney  Mines  one  furnace  with  a  capacity  of  200  tons 
(its  Ferrona  furnace  had  been  abandoned  as  early  as  1903). 
The  Canada  Iron  Corporation  owned  a  furnace  of  100  tons' 
capacity  at  Londonderry,  Nova  Scotia;  two  small  furnaces 
of  7  and  8  tons'  capacity  at  Drummondville,  Quebec,  a 
25-ton  furnace  at  Radnor  Forges,  Quebec,  and  two  fur- 
naces of  125  and  250  tons'  capacity  at  Midland,  Ontario. 
A  furnace  of  65  tons'  capacity  was  operated  at  Deseronto, 
Ontario.  The  Steel  Company  of  Canada  had  two  furnaces 
of  200  and  300  tons'  capacity  at  Hamilton,  Ontario.  The 
Algoma  Steel  Company  had  three  furnaces,  two  of  200  tons' 
capacity,  and  one  of  450  tons'  capacity,  at  Sault  Ste. 
Marie.  The  Atikokan  Iron  Company  had  one  furnace  of 
100  tons'  capacity  at  Port  Arthur,  Ontario.  In  1913  the 
^Production  of  Iron  and  Steel  in  Canada,  1911,  p.  13. 


192    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Canadian  Furnace  Company  put  up  a  350-ton  furnace. 
In  addition  to  the  ordinary  furnaces,  there  were  a  few  small 
electric  furnaces  in  operation  in  Welland,  Toronto,  and 
elsewhere. 

This  indicates  a  growing  development  in  the  production 
of  pig  iron,  and  it  is  natural  that  the  production  of  steel  and 
of  iron  and  steel  products  should  advance  in  correspondence 
with  this  progress.  Not  only  were  many  more  furnaces 
built,  but  the  new  furnaces  were  almost  universally  of 
greater  capacity  and  were,  as  a  rule,  more  regularly  oper- 
ated, though  not  always  to  full  capacity. 

It  is  not  surprising  to  find  that  the  figures  for  the  out- 
put of  pig  iron  indicate  a  more  rapid  advance  than  the 
figures  representing  the  number  of  furnaces.^  For  the  fiscal 
years  1909, 1910,  and  1911,  the  combined  product  amounted 
to  1,937,144  tons;  over  19  times  the  product  of  104,882 
tons  in  the  years  1896,  1897,  and  1898.2  ^^^  ^^  ttjig  tj^g 
amount  produced  and  exported,  on  which,  therefore,  no 
bounties  were  paid  in  the  more  recent  period,  and  the  out- 
put is  enlarged  by  16,342  tons.^  A  consideration  of  per- 
centages shows  that  the  proportion  of  home  produce  to 
total  consumption  advanced  from  36.2  per  cent  in  1884  to 
47.5  per  cent  in  1895,  and  to  66.9  per  cent  in  1911.  The 
lowest  percentage  of  home  product  to  total  consumption 
smce  1900  was  64.5  ^  in  1907. 

A  comparison  of  the  Canadian  output  of  pig  iron  with 
the  output  of  the  United  States  and  with  the  total  output 
of  the  world  shows  growth  in  a  different  way.  (See  table 
on  next  page.) 

The  Canadian  percentage  of  the  world's  pig-iron  produc- 
tion rose  from  .221  per  cent  in  1900  to  .608  per  cent  in  1901, 
to  1.142  per  cent  in  1910,  and  to  1.324  per  cent  m  1911. 

»  Appendix  B,  Table  I. 

*  The  total  production  of  pig  iron  in  the  calendar  year  1913  amounted 
to  1,023,973  metric  tons. 

»  Canada  Year  Book,  1911,  p.  108.  *  Appendix  B,  Table  I. 


THE  RECENT  fflSTORY  OF  THE  INDUSTRY    193 

Pig  iron  (metric  tons)  produced  in  Canada,  the  United  States^ 
and  the  world,  and  the  percentages  of  Canadian  to  the  world 
output  in  the  calendar  years  1900  to  1913,  inclusive  ^ 


Year 
(calendar) 

Canada 

United  States 

World 

Percentage 

1900 

87,512 

14,009,870 

39,599,437 

.221 

1901 

248,896 

16,132,408 

40,950,692 

.608 

1902 

325,076 

18,003,448 

44,342,579 

.733 

1903 

269,665 

18,297,400 

47,113,730 

.585 

1904 

274,777 

16,760,986 

46,069,501 

.589 

1905 

475,491 

23,340,258 

54,054,783 

.879 

1906 

550,618 

25,706,882 

59,074,861 

.932 

1907 

590,444 

26,193,863 

60,680,014 

.973 

1908 

572,123 

3  6,190,994 

48,640,479 

1.175 

1909 

687,923 

26,108,199 

61,217,004 

1.123 

1910 

752,090 

27,636,687 

65,908,674 

1.142 

1911 

837,558 

24,027,733 

63,210,694 

1.325 

1912 

927,484 

30,202,568 

— 

— 

1913 

1,023,973 

— 

— 

— 

Those  percentages  seem  small,  but  the  output  for  1901  was 
almost  three  times  that  for  1900,  the  output  for  1905  over 
five  times  that  of  1900,  and  the  output  for  1913  almost 
twelve  times  that  for  1900.  Canada  became  the  eighth 
producing  nation  of  the  world  by  moving  ahead  of  Sweden 
in  1908.2  Meanwhile,  the  output  of  the  United  States 
increased  from  a  little  over  14,000,000  metric  tons  in  1900 
to  something  more  than  23,000,000  metric  tons  in  1905 
and  to  approximately  30,000,000  metric  tons  in  1912.  In 
other  words,  the  Canadian  production  has  developed  rela- 
tively, though  not  absolutely  faster  than  that  of  the  United 
States.  It  is  still  too  early  to  expect  the  Canadian  pro- 
duct to  increase  absolutely  faster,  even  though  the  rela- 
tive advance  is  high. 

Likewise,  the  manufacture  of  steel  in  Canada  has  had  a 
growth  even  more  rapid  than  the  growth  of  the  world  por- 
duction  of  steel.   The  following  table  shows  that  the  per- 

»  Mineral  Industry,  1910,  p.  381;  1911,  p.  435;  1912,  p.  442;  1913,  p. 
423. 

^  Canada,  Report  on  Mineral  Production,  1907  to  1908,  p.  78. 


194.    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

centage  of  Canadian  to  world  output  advanced  from  .083 
in  1900  to  .529  in  1902,  to  .919  in  1905,  and  to  1.508  in  1911. 
The  Canadian  output  for  1902  was  eight  times  as  large  as 
that  of  1900;  the  output  for  1905  was  over  seven  times  as 
large  as  that  of  1900,  and  the  output  of  1911  was  almost 
thirty-seven  times  as  large  as  that  of  1900.  Meanwhile,  the 
output  of  the  United  States  increased  from  over  10,000,000 
tons  in  1900  to  20,000,000  tons  in  1905,  and  to  31,000,000 
tons  in  1913.  In  short,  the  American  output  was  little 
more  than  tripled  in  thirteen  years. 

Steel  production  {metric  tons)  in  Canada,  the  United  States, 
and  the  world,  and  the  percentage  of  Canadian  to  the  world 
output  for  the  calendar  years  1900  to  1913^ 


Year 

Canada 

United  States 

World 

Percentage 

1900 

23,954 

10,382,069 

28,727,239 

.083 

1901 

26,501 

13,689,175 

31,449,869 

.084 

1902 

184,950 

15,186,406 

34,972,497 

.529 

1903 

181,514 

14,756,691 

36,298,414 

.500 

1904 

151,165 

13,746,051 

36,148,079 

.414 

1905 

403,449 

20,354,291 

43.900,648 

.919 

1906 

515,200 

23,772,506 

49,635,998 

1.040 

1907 

516,300 

23,733,391 

51,273,340 

1.007 

1908 

598,183 

14,247,619 

44,359,522 

1.348 

1909 

766,795 

24,338,302 

53,499,974 

1.433 

1910 

835,478 

26,512,437 

58,656,312 

1.424 

1911 

880,278 

24,054,918 

58,375,701 

1.501 

1912 

— 

31,751,324 

— 

— 

1913 

— 

31,822,555 

— 

— 

§  3.  Let  us  turn  now  to  the  development  of  specific  Ca- 
nadian industrial  enterprises.  Few  have  had  so  enviable  a 
reputation  as  the  Nova  Scotia  Steel  and  Coal  Company 
and  the  firms  out  of  which  it  has  grown.  The  early  develop- 
ment of  the  Nova  Scotia  Steel  Company,  down  to  1896,  we 
have  already  considered.  The  original  reasons  for  placing 
the  furnaces  at  Ferrona  were  the  immense  deposit  of  ore 

1  Mineral  Industry,  1911,  p.  435;  1913,  p.  423. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    195 

and  the  proximity  to  coal  and  limestone,  thought  to  be  1 
located  there.  But  as  early  as  1896  difficulties  were  ex- 
perienced wath  the  fuel,  and  after  several  trials  with  Cape 
Breton  coal  the  company  ordered  a  large  amount  from  the 
General  Mining  Association  of  Nova  Scotia.  This  change, 
together  with  the  fact  that  the  company  was  procuring  an 
increasing  amount  of  ore  from  the  Wabana  Mine,  New- 
foundland, led  to  the  suggestion  that  the  furnace  work 
should  be  removed  to  Cape  Breton.^ 

Nothing  was  done,  however,  for  several  years.  In  1899 
the  output  was  larger  than  ever  before.  High  prices  pre- 
vailed, ore  was  being  shipped  abroad,  and  profits  and  divi- 
dends were  high.^  As  the  supply  of  coal  from  the  Pictou 
fields  was  quite  inadequate,  the  company  had  to  make  a 
change.  Accordingly,  in  1900,  the  Nova  Scotia  Steel  Com- 
pany acquired  all  the  properties,  rights,  and  leases  of  the 
General  Mining  Association  at  Sydney  Mines,  Cape  Bre- 
ton.^ Preparation  was  thus  made  for  more  extensive  opera- 
tions. In  1901  considerable  additions  and  improvements 
were  made  to  the  works  at  Ferrona  and  Trenton,  and  a 
large  new  coal-shipping  pier  was  built  at  North  Sydney.^ 
New  coal  areas  were  opened  at  Trenton  for  steam  and  heat- 
ing purposes  at  the  steel  works,  and  at  Sydney  Mines  to 
secure  coal  for  coking  purposes.^  Also  an  expert  was  em- 
ployed to  make  a  careful  survey  of  the  iron  areas  near 
Arisaig  and  Antigonish.® 

In  view  of  these  developments,  the  Nova  Scotia  Steel 
and  Coal  Company  was  formed,  absorbing  the  General 
Mining  Association,  the  directors  of  which  became  the 
directors  of  the  new  organization.^ 

Meanwhile,  coke  ovens  had  been  built  at  Sydney  Mines, 

since  it  was  cheaper  to  ship  coke  than  coal.^  But  as  coke 

^  Monetary  Times,  vol.  xxx,  p.  924.       *  Ibid.,  vol.  xxxiii,  p.  1187. 

-  Ibid.,  vol.  XXXIV,  p.  618.  *  Ibid.,  vol.  xxxv,  p.  493. 

^  Canadian  Mining  Review,  vol.  xx,  p.  168. 

^  Monetary  Times,  vol.  xxxv,  p.  166.      ''  Ibid.,  p.  197. 

*  Ibid.,  vol.  xxxvi,  p.  274. 


196    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

depreciates  in  quality  when  transported  any  distance,  it 
would  have  been  more  satisfactory  to  produce  the  iron 
near  the  coal  mines  and  coking  ovens.  Moreover,  the 
greater  proportion  of  the  ore  used  at  Ferrona  came  from 
Wabana,  and  the  distance  of  transport  from  Wabana  to 
Ferrona  exceeded  that  to  Sydney  Mines  by  over  one  hun- 
dred miles.  Since  piers  had  already  been  built  at  North 
Sydney,  near  Sydney  Mines,  the  production  of  pig  iron  and 
steel  at  Sydney  Mines  would  have  been  more  economical. 
Steel  could  have  been  shipped  to  Ferrona  and  Trenton  to 
be  worked  up  into  finished  products.  In  March,  1902,  the 
company  decided  to  build  immediately  at  Sydney  Mines. ^ 
The  subsequent  history  of  the  Nova  Scotia  Steel  and 
Coal  Company  is  a  story  of  steady  and  aggressive  progress 
in  the  output  of  ore,  pig  iron,  billets,  and  finished  products. 
Even  before  the  new  blast  furnace  was  built,  the  increas- 
ing demand  for  coal  could  not  be  met.^  The  additional  out- 
put of  iron  demanded  an  80  per  cent  increase  in  the  out- 
put of  coal  in  1903.^  Another  large  colliery  at  Bras  d'Or 
Lake  was  opened,  and  a  second  large  shipping  pier  was 
built  at  North  Sydney.^  The  output  of  iron  ore  was  in- 
creased from  4000  to  5000  tons  daily,  and  exports  were 
made  to  Rotterdam  and  Glasgow.  While  the  works  at 
Trenton  and  Ferrona  were  employed  at  full  capacity,  the 
new  blast  furnace  was  being  built.^  The  year  1904  marked 
the  completion  of  the  policy  of  expansion  in  Cape  Breton. 
It  was  claimed  that  the  Sydney  Mines  coal  mines  was  the 
only  paying  part  of  the  old  plant.  The  coal  mine  at  Coal- 
burn,  Nova  Scotia,  on  which  over  $500,000  had  been  spent, 
was  worthless,^  the  Ferrona  plant  had  outgrown  its  use- 
fulness, and  the  furnace  was  becoming  obsolete.^  For  these 
reasons  the  old  furnace  at  Ferrona  was  closed  down,^ 

*  Monetary  Times,  vol.  xxxv,  p.  1194.  *  Ibid.,  vol.  xxxvi,  p.  346. 

•  Ibid.,  vol.  xxx\^I,  p.  836.  *  Ibid.,  vol.  xxxvi,  p.  1601. 
5  Ibid.,  vol.  xxxvu,  p.  187.  ^  Ibid.,  vol.  xxxviii,  p.  166. 
7  Ibid.,  p.  195.  8  ifyid,,  pp.  227-28. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    197 

when  the  new  blast  furnace  was  opened  in  September  of 
1904. 

With  a  view  to  increasing  operations  in  new  and  more 
profitable  branches,  one  battery  of  30  Bauer  retort  coke 
ovens,  three  batteries  of  40  Bernard  retort  ovens,  three 
40-ton  open-hearth  steel  furnaces  of  the  modern  type  of  the 
basic  Siemens- Martin  process  were  erected,^  and  all  were 
in  operation  by  July,  1905. ^  In  1905  a  rolling  furnace,  to 
be  used  as  a  mixer,  was  installed,^  and  large  submarine  ore 
areas  were  purchased  north  of  Wabana.^  The  year  1907 
saw  the  acquisition  of  iron  ore  areas  in  Brazil.^  In  1908  a 
new  colliery  was  opened  at  Sydney  Mines,  a  new  forge 
building  constructed  and  other  improvements  made  at  New 
Glasgow.^  In  1909  and  1910  development  work  was  kept 
up  at  Wabana  by  the  installation  of  new  machinery.  In 
1910  the  blast  furnace  and  open-hearth  furnaces  were  re- 
modeled,^ In  the  same  year  the  increasing  demand  for 
finished  products  warranted  extensions  at  New  Glasgow, 
including  two  new  rolling  mills,  with  the  necessary  power 
plant  and  other  devices,  such  as  a  25-ton  electric  crane  for 
disposing  of  the  increasing  output.*  In  1911  machinery  for 
handling  all  kinds  of  heavy  steel  forgings  was  installed  in  a 
plant  which  surpasses  everything  of  the  kind  in  Canada. 
This  machinery  will  be  able  to  meet  all  Canadian  require- 
ments in  forgings  for  the  next  few  years.^ 

In  1912  the  Eastern  Car  Company  was  formed  by  di- 
rectors of  the  Nova  Scotia  Steel  and  Coal  Company  to 
build  steel  railway  cars  at  New  Glasgow  at  a  plant  in  close 
proximity  to  the  steel  plant.   In  1913  a  new  colliery  was 

^  Canadian  Mining  Review,  vol.  xxiii,  p.  77. 
'  Monetary  Times,  vol.  xxxviii,  p.  1349. 

•  Commercial  and  Financial  Chronicle,  vol.  T.xxxill,  p.  210. 

*  Monetary  Times,  vol.  xxxvi,  p.  417. 

^  Canadian  Mining  Journal,  vol.  xxvii,  p.  158. 

^  Ibid.,  vol.  XXIX,  p.  61.         ''  Monetary  Times,  vol.  XLVI,  p.  544. 

8  Ibid.,  vol.  xuv,  p.  122. 

^  Canadian  Mining  Journal,  vol.  xxxn,  p.  325. 


198    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

opened  and  a  50-ton  open-hearth  furnace  built  at  Sydney 
Mines.  A  bolt  and  rivet  factory  was  erected  at  New  Glas- 
gow to  produce  material  for  the  Eastern  Car  Company.* 
The  Nova  Scotia  Steel  and  Coal  Company  is  living  up  to 
its  reputation  of  entering  into  every  profitable  branch  of 
the  steel  trade. ^ 

Altogether  the  properties  of  the  Nova  Scotia  Steel  and 
Coal  Company  form  now  a  very  satisfactory  and  complete 
unit.  The  ore-beds  at  Wabana,  including  the  submarine 
areas,  give  evidence  of  being  more  valuable  than  was  at 
first  thought.^  The  coal  mines  at  Sydney  Mines  are  very 
extensive  and  contain  probably  1,000,000,000  tons,*  and  the 
coal  produced  by  five  collieries  is  excellent  for  the  produc- 
tion of  coke  for  smelting.  The  limestone  quarry  of  250 
acres  at  Point  Edward,  Cape  Breton,  is  connected  with  the 
furnace  at  Sydney  Mines  by  seventeen  miles  of  the  Inter- 
colonial Railway.  The  limestone  is  very  uniform  and  suit- 
able for  steel-making.  Other  properties  are  held  in  reserve.^ 
The  blast  furnace  is  nearer  to  coal  than  any  other  plant  in 
the  Dominion,  inasmuch  as  the  headgear  of  the  mine,  from 
which  coal  is  secured  for  coking,  is  within  sight  of  the  fur- 
nace.® The  machinery  is  of  the  most  modern  character. 
Coal-washers,  coke  ovens,  coal  and  ore  piers  at  North 
Sydney  and  Wabana,  the  railway  connecting  North  Sydney 
with  the  various  plants  at  Sydney  Mines,  steel  furnaces,  re- 
pair shops,  and  foundries,  dwelling  houses,  and  stores  at 
Sydney  Mines  complete  a  most  efficient  plant  for  the  pro- 
duction of  pig  iron  and  steel  billets. 

The  works  of  the  company  from  which  its  finished  pro- 
ducts are  shipped  are  situated  at  New  Glasgow,  Nova 
Scotia.  This  plant  includes  two  large  continuous  steel 
furnaces,  plate  mills,  guide  mills,  spike  machines,  forges, 

^  Monetary  Times,  vol.  xlvii,  p.  2223.  ^  Ibid.,  vol.  li,  p.  250. 

*  Ibid.,  vol.  XLin,  p.  2034. 

*  Souvenir  of  Nova  Scotia  Steel  and  Coal  Company,  1910,  p.  20. 

^  Canada,  Report  on  Mining  and  Metallurgical  Industries,  pp.  551-56. 
^  Canadian  Mining  Institute  Bulletin,  January,  1909,  p.  40. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    199 

car  axles  and  machine  shops,  structural  steel  shops,  etc., 
of  the  most  modern  character. 

The  success  of  the  Nova  Scotia  Steel  and  Coal  Company 
is  a  byword  in  Canadian  finance.  This  company  is  one  of  a 
few  that  has  had  a  steady  growth  in  output  and  earnings 
from  its  inception.^  Scarcity  of  labor  has  been  at  times  a 
dangerous  handicap;  but  the  use  of  labor-saving  devices 
and  modem  machinery,  as  well  as  the  rounding  out  of  the 
plant,  has  so  reduced  costs  as  to  place  the  company  on  a 
very  favorable  competitive  basis. ^  The  company  seems  to 
have  had  a  faculty  for  meeting  special  conditions  by  the 
adoption  of  original  mechanical  devices,  and  other  inven- 
tions.^ 

Cautious,  conservative,  yet  at  the  same  time  aggressive 
management  has  been  an  important  factor  during  the 
period  of  development.^  Many  improvements  had  been 
made  out  of  earnings,  until  a  recent  change  in  policy  led  to 
the  issuing  of  a  common  stock  bonus  or  dividend  of  $1,000,- 
000  in  1909,  to  cover  such  outlay. 

The  varied  nature  of  the  output  has  ordinarily  been  an 
advantage.  Since  all  lines  of  production  are  not  apt  to  be 
affected  by  competition  and  low  prices  at  the  same  time, 
profits  are  less  liable  to  extreme  fluctuation.  More  recent 
specialization  in  the  direction  of  railway  supplies  has  prob- 
ably somewhat  reduced  this  advantage;  especially  as  the 
company  does  not  produce  steel  rails,  and  hence  does  not 
directly  benefit  from  new  railway  construction.  During 
1911  prices  of  iron  and  steel  were  low,  but  this  difficulty 
was  met  by  a  reduction  of  costs.  That  the  profits  did  not 
fall  off  shows  that  substantial  economies  have  been  ef- 
fected; and  altogether  that  the  company  has  passed 
through  the  stage  of  development  during  which  it  needed 
assistance. 

^  McCuaig's  Circulars,  June  28,  1911. 

2  Monetary  Times,  vol.  XLiv,  p.  122. 

^  Canadian  Mining  Institute  Bulletin,  January,  1909,  p.  43. 

*  Canadian  Mining  Review,  vol.  xxiii,  p.  103. 


200    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  4.  If  the  growth  of  the  Nova  Scotia  Steel  and  Coal 
Company  has  been  admirably  conservative,  yet  regular, 
that  of  the  Dominion  Iron  and  Steel  Company  has  been 
spectacular,  but  fluctuating. 

The  inspiration  for  the  venture  came  from  a  well-known 
Boston  capitalist  and  financier,  Mr.  Henry  M.  Whitney,^ 
who  had  already  become  a  familiar  figure  in  Canadian 
finance  through  his  connection  with  the  Dominion  Coal 
Company.  In  1893  the  Dominion  Coal  Company  revolu- 
tionized the  whole  coal  trade  by  expanding  its  marketing 
to  New  England  and  St.  Lawrence  ports.  The  Canadian 
market,  however,  was  limited  during  the  close  of  naviga- 
tion on  the  St.  Lawrence  in  winter,  when  the  coal  company 
had  either  to  bank  its  product  or  close  down.  Then  the 
Boston  Smoke  Nuisance  Law  of  1896  reduced  the  American 
market  for  Nova  Scotia  coal,  which  is  none  too  clean. 
Moreover,  the  increase  in  1897  from  40  to  67  cents  in  the 
duty  on  coal  entering  the  United  States  resulted  in  an  in- 
crease in  the  duties  collected  on  Nova  Scotia  coal  from 
$499,682  m  1897  to  $786,587  in  1898;  an  increase  in  the 
average  ad  valorem  duty  from  14.24  per  cent  to  24,15  per 
cent,  2  and  a  decrease  in  the  amount  of  coal  sold  in  New 
England.  At  its  best  the  United  States  offered  a  fickle 
market  for  Canadian  coal.^ 

It  was  to  relieve  this  situation  that  Mr.  Whitney  pro- 
ceeded to  establish  large  iron  and  steel  works  at  Sydney  as 
an  advantageously  regular  purchaser  of  the  output  of  coal. 
In  1899  the  Dominion  Iron  and  Steel  Company  made  a 
contract  with  the  Dominion  Coal  Company  for  the  supply 
of  coal  from  the  Phelan  seam,  which  on  analysis  had  proved 
suitable  for  the  manufacture  of  iron  and  steel. 

Evidently,  the  iron  and  steel  project  had  some  merits  of 

1  McGrath,  op.  cit.,  p.  372. 

2  United  States,  Tariff  Comparison,  part  ii,  Table  of  Imports,  1894- 
1904,  p.  755. 

'  Canadian  Mining  Review,  vol.  xxii,  p.  137. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    201 

its  own.  When,  in  1898  and  1899,  it  was  reported  that  a 
large  iron  and  steel  plant  was  to  be  built  at  Sydney,  finan- 
cial and  trade  papers  immediately  vied  with  one  another 
in  a  glowing  description  of  the  favorable  conditions  under 
which  the  enterprise  would  be  launched.  The  feature  from 
which  most  was  expected  was  the  nature  of  the  ore  mines 
at  Wabana,  Bell  Island,  Newfoundland,  which  had  been 
purchased  from  the  Nova  Scotia  Steel  Company  for  $1,000,- 
000,  It  was  reported  that  the  possession  of  the  mine  would 
enable  the  new  company  to  procure  ore  at  a  lower  price,  to 
manufacture  cheaper,  and  to  sell  for  less  than  any  other 
producer  in  the  world,  and  at  the  same  time  to  make  as  large 
profits  as  any  competitor.  Ore  could  be  fed  to  the  blast 
furnaces  at  Sydney  at  a  maximum  cost  of  $1.25  per  ton. 
Minnesota  ore  had  to  be  carried  by  rail  from  the  mines  to 
the  Lake,  then  shipped  through  the  Lakes  and  canals  to  a 
port  on  Lake  Erie,  unloaded  and  carried  by  rail  again  to  the 
furnace  mouth.  Wabana  ore  could  be  mined  by  open  cut 
and  loaded  on  board  ship  at  a  single  handling  for  45  cents 
per  ton  as  compared  with  50  to  80  cents  for  mining  alone  in 
Minnesota.  It  could  be  shipped  380  miles  over  the  Gulf  of 
St.  Lawrence  in  the  largest  ocean-going  vessels  at  a  cost  of 
45  cents  a  ton,  as  compared  with  a  water  rate  of  about  $1 
per  ton  for  shipments  down  the  Lakes.  It  is  true  that  the 
Wabana  ore  is  not  so  rich  as  that  of  the  Lake  Superior  re- 
gion, but  it  is  a  high-grade  ore  which  mixes  readily  with 
others.  In  short,  Sydney  was  to  have  ores  at  a  cost  of  $1.25 
as  compared  with  $2.50  to  $3.25  per  ton  at  Pittsburg.* 
There  seems  to  have  been  some  justification  for  such  hopes, 
for  in  1907  the  cost  of  iron  ores  at  Sydney  was  82  cents  per 
ton.2 

Proximity  to  the  European  market  was  another  favor- 
able condition.  Nearly  all  American  furnaces  are  handi- 
capped by  remoteness  from  the  seaboard.   The  Pittsburg 

1  McGrath,  op.  cit,  p.  381. 

*  Canada,  Report  of  Mining  and  Metallurgical  Industries,  p.  537. 


202    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

output  has  to  be  hauled  by  rail  to  tidewater,  an  average 
distance  of  450  miles,  at  a  cost  of  half  a  cent  per  mile  per 
ton,  or  $2.25  per  ton.  Alabama  iron  reaches  New  Orleans 
after  a  carriage  of  530  miles  at  a  cost  of  $2.65  per  ton.  This 
advantage  was  increased  by  the  fact  that  Sydney  is  800 
miles  nearer  to  Liverpool  than  is  New  York,  and  2200 
miles  nearer  than  New  Orleans.  Sydney's  position  on  a 
splendid  harbor  on  the  seaboard,  where  ores  and  coal 
could  be  cheaply  assembled  and  from  which  products 
could  be  conveniently  shipped,  certainly  offered  an  ex- 
traordinary advantage. 

It  was  estimated  that  low  costs  of  production  at  Sydney, 
together  with  low  freight  rates  to  Europe,  would  permit 
the  firm  to  lay  down  iron  and  steel  in  England  at  a  hand- 
some profit  even  in  times  of  depression.  The  company  ex- 
pected to  land  pig  iron  in  Liverpool  at  a  cost  of  $8  per  ton, 
and  steel  billets  at  $13,  while  the  average  price  at  which 
these  had  sold  in  England  for  the  decade  1890  to  1900  had 
been  $14.60  for  pig  iron  and  $22.90  for  steel  billets. ^  Such 
an  opportunity  was  not  to  be  overlooked.  The  organi- 
zation of  the  industry  was  to  be  in  the  hands  of  the  most 
capable  men  that  money  could  procure;  every  stage  of  devel- 
opment was  to  be  properly  cared  for;  the  plant  was  to  be 
of  the  most  advanced  type,  and  the  firm  was  to  profit  by 
the  experience  of  existing  industries  on  both  sides  of  the 
Atlantic. 

Sydney  was  chosen  as  the  site  of  the  steel  works  be- 
cause it  was  already  the  outlet  of  the  coal  trade;  it  was 
located  in  the  center  of  the  coal  and  limestone  area;  it 
possessed  a  tract  of  land  near  the  waterfront  eminently 
suited  to  the  purpose;  the  harbor  was  capacious  and  safe, 
and  already  known  as  a  coaling  port;  it  was  a  terminus  of 
the  Intercolonial  Railway  and  a  point  of  call  of  many  Amer- 
ican and  Canadian  coastal  steamers;  and  a  40-mile  railway 
connected  Sydney  with  Louisburg,  an  all-winter  shipping 
1  McGrath,  op.  cit.,  pp.  376-84. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    203 

port.^  The  promise  of  exemption  from  local  taxation  for 
thirty  years  and  a  grant  of  five  hundred  acres  of  property 
on  the  harbor  ^  were  other  inducements  to  build  at  Sydney. 
It  has  been  said  that  if  the  Dominion  Government  had 
not  granted  bounties,  the  Dominion  Iron  and  Steel  Com- 
pany might  not  have  begim  the  enterprise.  Certainly,  an 
estimate  that  bounties  amounting  to  $8,095,000  would 
be  received  before  1908  was  no  small  encouragement  to 
"timid"  capital.'  My  own  opinion  is  that  the  Sydney 
plant  would  have  been  built  in  any  case.  That  the  real 
causes  for  the  development  of  this  important  company 
were  industrial  has  been  frankly  acknowledged  in  a  letter 
written  in  1900  to  Mr.  H.  M.  Whitney  by  Mr.  Graham 
Fraser,  then  general  manager  of  the  Nova  Scotia  Steel 
Company.  After  a  conference  the  two  interests  agreed  to 
cooperate  to  get  the  bounties  extended  for  a  period  of  five 
years  from  1902.  Although  the  bounties  would  help  in 
securing  capital,  Mr.  Whitney  was  willing  to  go  on  with 
the  works  whether  or  not  the  bounties  were  given.  In  1903 
a  letter  from  Mr.  Fraser  to  Mr.  Whitney  was  quoted  by 
Mr.  Borden,  leader  of  the  Conservative  Opposition,  to  show 
that  Sir  Charles  Tupper,  rather  than  the  Liberal  Party,  had 
been  responsible  for  the  development  of  the  Dominion  Iron 
and  Steel  Company,  inasmuch  as  Sir  Charles  had  intro- 
duced Mr.  Whitney  to  influential  financial  interests  in 
England.  Mr.  Graham  wrote:  "You  [Whitney]  stated  in 
1899  that  you  thought  we  had  better  go  on  with  our  new 
works,  as  you  did  not  believe  the  Government  would  ex- 
tend the  bounties.  As  Sir  Charles  Tupper  was  going  over 
to  England,  you  could  get  him  to  introduce  you  to  parties 
who  would  find  the  capital.  I  replied  that  if  you  begin  to 
build  the  large  plant  you  are  talking  of,  I  do  not  believe  the 
bounties  will  be  extended."  *  A  more  naive  confession  of  the 

1  McGrath.  op.  cit.,  p.  372.  2  /^,-^^  pp  384-85. 

*  Commercial  and  Financial  Chronicle,  vol.  Lxxii,  p.  583. 
4  Debates,  1903,  pp.  7933-35. 


204    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

methods  used  to  extort  Government  favors  and  of  the  fact 
that  the  plant  would  in  all  probability  have  been  built  can 
scarcely  be  conceived. 

By  1900  extensive  building  operations  were  being  carried 
on.  Four  blast  furnaces  of  the  latest  type  and  capable  of 
producing  250  to  400  tons  of  pig  iron  daily,  ten  basic  open- 
hearth  steel  furnaces  of  1000  tons'  daily  capacity,  a  35- 
inch  blooming  mill,  400  Hoffman  coke  ovens,  a  coal-wash- 
ing plant,  and  a  large  machine  shop  and  foundry  were 
installed.^  The  coking  plant  was  put  in  operation  as  early 
as  December,  1900.^  Skilled  labor  was  imported  from  Eu- 
rope.' Since  the  limestone  deposits  at  Sydney  appeared  to 
be  less  extensive  than  had  been  expected,^  large  quarries 
at  Bras  d'Or  Lake  were  purchased  to  insure  an  adequate 
supply  of  fluxing  materials.  The  first  furnaces  were  blown 
in  on  February  2,  1901,  and  others  in  October,  1901.^  Pig 
iron  was  shipped  to  Scotland  and  to  the  United  States  later 
in  the  year.^  The  manufacture  of  steel  was  commenced  in 
December,  1901,  with  highly  satisfactory  results,  according 
to  a  test  made  by  the  Baldwin  Locomotive  Works  of 
Philadelphia.''  Steel  ingots  were  shipped  to  Scotland,  pend- 
ing the  completion  of  the  billet  mill.^  The  building  of  a 
steel-rail  mill  was  seriously  contemplated  in  1901,  but  the 
purchase  of  rails  elsewhere  by  the  Dominion  Government 
in  1902  altered  the  plans  of  the  company.  The  production 
of  structural  steel,  for  which  there  was  a  larger  Canadian 
market,  was  favored  for  a  time.^  The  completion  and  per- 
fection of  the  organization  of  other  departments,  such 

1  E.  Phillips,  "Competition  in  the  Iron  and  Steel  Industry,"  Engineer' 
ing  Magazine,  vol.  xxi,  p.  345. 

^  Commercial  and  Financial  Chronicle,  vol.  lxxi,  p.  1169. 

'  Iron  Age,  vol.  lxvii,  September  5,  p.  41. 

*  Monetary  Times,  vol.  xxxiv,  p.  264. 

^  Commercial  and  Financial  Chronicle,  vol.  LXXiil,  p.  959. 

®  Monetary  Times,  vol.  xxxv,  p.  618. 

'  Ibid.,  p.  843. 

8  E.  Porritt,  Sixty  Years  of  Protection  in  Canada,  p.  127. 

9  Iron  Age,  vol.  lxx,  December  25,  p.  3. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    205 

as  the  coal-washing  plant,  was  thought  advisable,  before 
pushing  the  rail  mill  to  completion.^  Modern  machinery- 
was  placed  in  the  mines  and  at  the  shipping  piers.^  Ad- 
ditional ore  areas  were  purchased  in  Cuba  and  Labrador, 
and  Swedish  ores  were  imported  to  mix  with  the  Wabana 
ores.^ 

The  Dominion  Iron  and  Steel  Company  has  not  always 
enjoyed  favorable  financial  conditions.  Indeed,  the  com- 
pany has  on  several  occasions  faced  serious  financial  embar- 
rassment. Although  it  has  never  been  insolvent,  the  irreg- 
ularities caused  by  extravagance  and  prolonged  conflict 
with  the  Dominion  Coal  Company  have  been  very  serious. 

In  the  first  place  there  was  much  reckless  outlay  of  funds. 
Whitney,  the  president,  and  Moxham,  the  general  man- 
ager, were  as  extravagant  in  building  the  plant  as  in  talk- 
ing of  it.  Frequent  changes  in  the  official  staff  and  lack  of 
coordination  of  the  different  departments  had  an  unfavor- 
able effect.*  It  is  said  that  the  whole  works  could  have  been 
built  for  two  thirds  of  what  they  cost  and  that  $7,000,000 
or  $8,000,000  was  wasted.  Moxham  had  no  idea  of  costs, 
nor  did  he  know  how  to  organize  and  adjust  the  various 
departments.  He  failed  to  ascertain  at  an  early  date  just 
what  class  of  steel  could  be  made  from  the  ore,  which  was 
discovered  to  be  non-Bessemer  after  considerable  expendi- 
ture had  been  made.^  He  seemed  to  think  that  cheap  ore 
and  coal  would  place  the  finished  product  in  the  world 
market  at  any  time,  but  the  company  found  that  it  could 
afford  to  sell  pig  iron  and  steel  billets  only  in  times  of  ex- 
ceptionally high  prices.^  The  directorate  itself  was  largely 
ignorant  of  the  business.  The  ore  mines  did  not  turn  out  as 
expected  at  first;  and,  as  we  shall  see,  the  coal  supply  was 
a  constant  source  of  trouble.'^ 

1  Commercial  and  Financial  Chronicle,  vol.  i>xxv,  p.  27. 

'  Ibid.,  p.  27.  3  Monetary  Times,  vol.  xxxvi,  p.  171. 

*  Canadian  Mining  Review,  vol.  xx,  p.  76. 

^  Ibid.,  vol.  xxn,  p.  186.  ^  ibid.,  vol.  xxm,  p.  103. 

'  Jeans,  op.  ciL,  pp.  123-25. 


206    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

The  subsequent  rounding-out  and  extension  of  the  plant 
has  been  conducted,  for  the  greater  part,  under  unfavorable 
financial  conditions  caused  by  the  initial  extravagance  and 
the  increase  of  floating  debt  involved  in  the  relations  with 
the  Dominion  Coal  Company.  The  lease  of  the  proper- 
ties of  the  Dominion  Coal  Company  at  an  excessive  rental 
soon  resulted  in  a  large  floating  debt,  which  amounted 
to  $2,500,000  in  1903,  at  a  time  when  financial  conditions 
were  not  favorable  to  issuing  new  bonds,  either  for  retire- 
ment of  the  debt  or  for  construction.^ 

In  spite  of  financial  difficulties  the  plant  was  gradually 
made  efficient.  The  lease  was  canceled  and  a  new  coal  con- 
tract arranged.  In  1903  the  blast  furnaces  had  a  greater 
capacity  than  the  steel  plant,  and  the  steel  plant  itself  had 
to  sell  its  product  in  the  unfinished  state  ^  in  the  United 
States  and  Scotland  as  well  as  in  Canada.^  As  the  demand 
for  steel  billets  in  the  United  States  had  fallen  off  and 
prices  had  declined,  the  open-hearth  furnaces  were  closed 
and  the  night  shift  taken  off  the  blooming  mills.^  Since 
finished  products  are  always  more  marketable  ^  than 
primary  products,  the  company  decided  to  erect  finishing 
mills.  The  idea  of  exporting  seems  to  have  been  conven- 
iently forgotten.  Plans  for  a  rail  mill,  with  a  capacity  of 
1000  tons  instead  of  3000  tons  per  day,  were  made,  with 
the  idea  that  such  a  mill  would  be  large  enough  to  take  care 
of  the  Canadian  trade.  The  erection  of  rod  mills,  of  plate, 
angle,  and  bar  mills,  was  also  suggested.^ 

The  realization  of  some  of  these  plans  took  several  years. 
To  reduce  costs  during  the  period  of  stress,  wages  and  sala- 
ries were  reduced,^  and  a  long-continued  strike,  in  protest, 
practically  shut  down  the  entire  works.*   Ultimately  the 

1  Commercial  and  Financial  Chronicle,  vol.  lxxv,  p.  1402. 

*  Iron  Age,  vol.  lxxii,  July  30,  p.  27. 

*  Monetary  Times,  vol.  xxxvi,  p.  734.  ■*  Ibid.,  vol.  xxxvii,  p.  149. 
6  Ibid.,  p.  149.  ^  Ibid.,  vol.  xxxvi,  p.  1304. 
^  Commercial  and  Financial  Chronicle,  vol.  Lxxvii,  p.  2337. 

*  E.  Porritt,  The  Revolt  in  Canada,  p.  130. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    207 

men  returned  to  work  at  the  old  rates,*  but  only  after  the 
strike  had  cost  the  company  about  $500,000.  ^ 

The  wu-e-rod  mill  was  in  operation  in  1904,  and  its  prod- 
uct gave  satisfaction  to  consumers.^  So  many  orders  were 
received  that  a  double  shift  was  put  on  in  December,  1904.^ 
Unfortimately,  as  soon  as  the  wire-rod  mill  was  in  a  condi- 
tion to  produce,  the  United  States  Steel  Corporation  pre- 
sented a  contract  to  Canadian  wire-drawers  and  nail- 
makers,  engaging  them  to  buy  all  rods  for  six  months  from 
it.  All  wire-makers  except  James  Pender,  of  St.  John,  New 
Brunswick,  who  had  already  arranged  to  buy  from  the 
Dominion  Iron  and  Steel  Company,  were  forced  to  sign. 
In  spite  of  this  drawback,  by  1905,  the  rod  mill  was  de- 
scribed as  "running  to  perfection,"  and  was  supplying 
eighty-five  per  cent  of  the  iron  rods  used  in  Canada. 
Eleven  of  the  thirteen  nail  factories  were  purchasing  from 
it.^  The  steel-rail  mill  was  in  operation  by  June,  1905,  and 
doing  good  work  on  Government  orders.^ 

In  the  latter  part  of  1906  a  dispute  with  the  coal  com- 
pany, in  regard  to  the  quantity  and  grade  of  coal  to  be  de- 
livered, forced  the  steel  company  to  bank  its  furnaces.  The 
extended  lawsuit  that  followed  necessitated  asking  for  a 
large  amount  of  credit  from  the  banks  to  cover  an  increas- 
ing floating  debt,  and  to  cover  large  items  of  accounts  re- 
ceivable and  of  raw  and  manufactured  material.^  An  ad- 
verse court  decision  might  have  completely  wiped  out  the 
claim  against  the  coal  company,  and  have  left  the  steel 
company  with  liabilities  it  could  not  meet.  The  carrying 
of  the  case  from  one  court  to  another,  with  no  prospect  of 
immediate  settlement,  the  necessity  for  a  larger  amount 

^  Commercial  and  Financial  Chronicle,  vol.  Lxxvin,  p.  2337. 

^  Monetary  Times,  vol.  lxxix,  p.  502. 

^  Canadian  Mining  Review,  vol.  xxiii,  p.  254. 

*  Mojietary  Times,  vol.  xxxviii,  p.  724. 

^  Iron  Age,  vol.  xxxviii,  p.  1350. 

^  Ibid.,  vol.  iiXx\%  p.  571. 

'  Commercial  and  Financial  Chronicle,  vol.  Lxxxvn,  p.  99. 


208    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

of  working  capital,*  as  well  as  more  capital  for  extensions, 
if  the  policy  of  roimding-out  the  plant  was  to  be  continued, 
all  made  advisable  a  reorganization  of  finances  to  reduce 
fixed  charges.  This  included  a  reduction  of  the  sinking 
funds,  from  $257,500  per  year  for  the  period  1908  to  1911, 
to  $164,170  for  the  period  thereafter.^ 

During  1907  and  1908  the  Dominion  Iron  and  Steel  Com- 
pany was  one  of  the  few  companies  that  did  not  suffer  from 
the  depression  of  trade.  Although  nearly  all  other  mills 
were  closed  for  a  time,  all  departments  of  the  Dominion 
Iron  and  Steel  Company  were  kept  in  full  operation,  and 
the  volume  of  the  business  was  maintained  with  steady 
employment  and  no  decrease  of  wages  for  the  employees.' 
Naturally  the  curtailment  of  the  home  market  and  low 
prices  were  disadvantages,  but  these  were  offset  by  the 
exportation  of  steel  rails  to  England  and  India.^  Condi- 
tions were  practically  the  same  in  1909.  Large  orders  came 
in  regularly  for  both  rails  and  rods.  Mr.  Plummer,  the 
president,  reported  that  the  orders  of  the  company  were 
beyond  its  capacity  and  that  extensions  had  to  be  pushed.' 

When  the  coal  difficulty  was  partly  settled  through  the 
payment  by  the  coal  company  of  $2,750,000  in  the  early 
part  of  1909,^  the  floating  debt  was  paid  off,  and  the  com- 
pany had  a  cash  reserve.'  Since  then  financial  and  indus- 
trial operations  have  been  comparatively  unhampered. 
There  has  been  a  continuous  recovery  from  the  precarious 
position  rendered  inevitable  by  prolonged  litigation.  A 
report  by  British  experts  in  1909  said  that  "no  iron  and 
steel  works  is  in  a  better  position  for  the  supply  of  cheap 
raw  materials  for  the  manufacture  of  pig  iron  and  steel. 
The  fact  that  they  own  very  valuable  ore  and  limestone 
properties,  together  with  a  special  agreement  whereby  they 

^  Commercial  and  Financial  Chronicle,  vol.  lxxxvi,  p.  1587. 

^  Estimated.  '  Monetary  Times,  vol.  xlii,  p.  2280. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxxviii,  p.  1616. 

5  Ibid.,  vol.  Lxxxix,  p.  595.  ^  Ibid.,  vol.  lxxxviii,  p.  675. 

">  Ibid.,  p.  1064. 


'  THE  RECENT  HISTORY  OF  THE  INDUSTRY    209 

are  assured  of  cheap  fuel  supply,  renders  them  independent 
of  market  fluctuations  and  places  them  in  a  most  excep- 
tional position.  The  cost  of  mining  the  100,000,000  tons  of 
ore  in  sight  is  likely  to  remain  so  low  as  to  yield  a  handsome 
profit  either  by  converting  it  into  finished  products  or  by 
selling  it  in  the  open  market."  ^ 

This  report,  so  widely  published,  seemed  to  justify  ex- 
tensions to  increase  the  output  and  reduce  costs  in  order 
to  offset  the  expected  ending  of  the  bounty  system.  ^  A  new 
blast  furnace  was  added  to  enable  the  company  to  devote 
four  furnaces  to  the  production  of  basic  pig  for  the  steel 
plant,  and  to  produce  foundry  pig  without  any  interfer- 
ence with  the  steady  working  of  the  steel  department.  A 
new  finishing  mill,  to  use  a  large  tonnage  of  material  pre- 
viously treated  as  scrap,  was  to  give  the  company  a  larger 
output,  by  enlarging  the  varieties  of  the  finished  material 
it  could  turn  out.^ 

The  chief  development  in  1910  was  the  amalgamation 
of  the  Dominion  Iron  and  Steel  Company  and  the  Domin- 
ion Coal  Company  into  the  Dominion  Steel  Corporation, 
which  later  secured  control  of  the  Cumberland  Railway 
and  Coal  Company  at  Springhill,  Nova  Scotia.  Each  of 
these  developments  will  be  more  fully  discussed  in  another 
chapter.  It  is  enough  to  say  at  present  that  thereby  a  sup- 
ply of  coal  for  a  long  period  of  time  was  assured,  and  that 
further  economies  were  expected  from  this  scheme. 

In  1911  discussion  centered  around  the  question  of  the 
renewal  of  the  bounties,  or  the  possibility  of  securing  pro- 
tective duties;  or,  failing  either,  the  possibility  of  reducing 
costs  in  order  to  keep  up  the  measure  of  profits.  The  Do- 
minion Steel  Corporation  was  feeling  the  pressure  of  the 
competition  of  surplus  American  stock.  While  Mr.  Plum- 
mer  admitted  that  the  bounties  were  no  longer  necessary 
for  the  general  business  of  the  company,  he  declared  that 

1  Annual  Report,  1909.  *  Statist,  vol.  LXIV,  p.  88. 

3  Ibid.,  pp.  127-28. 


210    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

reciprocity  would  end  the  wire-rod  business  and  would 
prevent  the  renewal  of  bounties  on  wire  rods.^  Mr,  Plum- 
mer  asked  for  rod  bounties  for  another  year  and  a  half,  so 
as  to  allow  the  transition  stage,  during  which  extensions 
were  being  completed,  to  be  tided  over. 

Since  neither  protection  nor  bounties  seemed  forthcom- 
ing, an  additional  new  plant  was  installed  in  order  to 
reduce  costs  in  1911.  The  annual  report  of  1911  declared 
that  success  in  the  future  depended  on  the  possibility  of 
increasing  the  output.  Two  open-hearth  mixers,  with  a 
capacity  of  500  tons  each,  were  added,  to  eliminate  the  ne- 
cessity of  purchasing  expensive  ores.  A  third  Bessemer  fur- 
nace was  ready  in  the  autumn  of  1911  to  assure  a  sufficient 
supply  of  iron  and  a  larger  output  of  steel  per  furnace;  120 
coke  ovens  were  put  in  full  blast  late  in  the  season  ;2  a  new 
cold  rolling  mill  and  extensions  to  the  old  cold  rolling  mill, 
which  was  converted  into  a  bar  and  rod  mill,  were  also 
added.'  The  two  new  furnaces  were  started,  one  in  1911 
and  the  other  in  1912.^  The  company  now  began  to  pro- 
duce wire,  wire  nails,  bolts,  nuts,  etc.,  in  order  to  offset  the 
loss  of  the  bounties  and  to  insure  a  market  and  a  profitable 
use  for  the  output  of  rods.  A  new  merchant-bar  mill,  for 
rolling  all  sizes  of  merchant  bar,  rivet,  steel,  bolt,  and  bar 
material  was  also  installed.^  The  nail  mill  was  operating 
so  satisfactorily,  in  May,  1912,^  that  the  company  ordered 
additional  machinery  with  the  idea  of  ultimately  consum- 
ing the  entire  product  of  the  wire-rod  and  wire  mills. ^ 

The  Dominion  Steel  Corporation,  with  its  outstanding 

common  stock  of  $35,656,800,  its  preferred  stock  of  $7,000,- 

000,  preferred  stock  of  subsidiary  companies  amounting  to 

$8,000,000,  and  funded  and  mortgage  debt,  including  that 

of  subsidiary  companies,  amounting  to  about  $25,000,000,^ 

1  Financial  Post,  February  11,  1911,  p.  1. 

^  Monetary  Times,  vol.  XLVii,  p.  742.     '  Iron  Age,  vol.  Lxxrx,  p.  101. 

*  Monetary  Times,  vol.  xlix,  p.  406.       ^  Ibid.,  vol.  XL^^I,  p.  742. 

6  IMd.,  vol.  XL VIII,  p.  2226.  "  Ibid.,  vol.  l,  p.  292. 

8  Annual  Report,  1912,  p.  22. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    211 

is  one  of  the  largest  and  most  important  industrial  enter- 
prises in  Canada.  The  steel  plant  at  Sydney,  the  ore 
deposits  at  Wabana  and  elsewhere,  the  coal  mines  at  Glace 
Bay,  Cape  Breton,  and  at  Springhill,  Nova  Scotia,  are  all 
in  a  state  of  high  eflSciency  mider  aggressive  management. 
The  company  produces  a  wide  variety  of  products  at  a 
good  margin  of  profit.  Mr.  Plummer  said,  in  1912:  "Our 
hopes  for  the  Sydney  plant  are  bound  up  with  the  in- 
crease of  its  output,  partly  from  the  profit  from  increased 
sales,  but  most  of  all  from  decreased  costs  which  will  re- 
sult from  the  larger  output.  This  will  complete  the  work 
which  the  bounties  have  so  far  helped  us  to  carry  on.^  We 
have  had  to  exercise  patience  in  the  past  and  we  must  wait 
the  completion  of  the  new  work  before  we  can  get  large 
results,  but  your  directors  have  the  most  implicit  confidence 
in  the  outcome  of  your  steel  business,  that  there  will  before 
long  be  earnings  sufficient  to  satisfy  your  reasonable  ex- 
pectations. It  has  taken  longer  to  reach  our  goal  than  we 
expected,  but  the  getting  of  a  largely  increased  tonnage  is 
now  purely  a  matter  of  time,  the  market  for  it  is  assured 
and  with  these  we  cannot  fail  to  secure  prosperity  for  the 
plant."^  In  1912  he  reported  that  Canadian  rail  mills  could 
supply  the  rail  demand  of  Canada,  at  least  all  but  an  ex- 
ceptional demand.^  Apropos  of  the  building  of  the  United 
States  Steel  Corporation  plant  in  Canada,  Mr.  Plummer 
said:  "There  is  room  for  all  of  us  in  Canada.  The  Domin- 
ion Steel  Corporation  is  not  afraid  of  competition  from  the 
United  States  Steel  Trust  or  anybody  else."  Mr.  J.  R. 
Wilson,  vice-president,  said:  "One  may  draw  his  conclu- 
sions as  regards  competition.  For  instance,  in  buying  ore 
the  Dominion  Steel  Corporation  pays  about  $1.75  per  ton, 
while  the  United  States  Steel  Corjjoration  pays  $3  to  $4." 
Yet  he  admits  that  competition  may  be  keenly  felt  in  west- 

»  McCuaig's  Circular,  October  26,  1910. 

*  Annual  Report,  1911,  p.  9. 

*  Monetary  Times,  vol.  XLtx,  p.  356. 


212    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

em  Ontario.^  In  1913  Mr.  Plummer  gave  assurance  that 
the  corporation  was  doing  a  very  satisfactory  business,  and 
that  there  was  no  real  reason  for  the  drop  in  prices  of  the 
stocks  of  the  company.^  Evidently  the  future  of  the  Do- 
minion Steel  Corporation  is  bright,  indeed,  notwithstand- 
ing the  loss  of  the  bounties, 

§  5.  The  establishment  of  an  iron  and  steel  industry  at 
Sault  Ste.  Marie,  Ontario,  by  Mr.  F.  H.  Clergue,  was  the 
sequel  to  the  rapid  development  of  a  power  and  paper 
plant  at  the  same  place.  When  experts,  working  on  a  proc- 
ess for  saving  sulphur  in  the  production  of  nickel,  found 
that  the  residue  was  an  alloy  of  steel,  so  superior  to  any- 
thing known  that  the  Krupps,  the  great  German  gun- 
makers,  made  a  contract  for  a  five  years'  supply,  a  reduc- 
tion works  and  a  ferro-nickel  plant  were  immediately  built. 
But  since  the  percentage  of  nickel  in  the  product  was  about 
7  per  cent,  while  the  amount  required  for  armor  plates  is 
only  about  3|  per  cent,  and  as  a  deposit  of  iron  ore  was 
found  at  the  now  well-known  Helen  Mine,  near  Michipi- 
coten,  in  1897,^  Clergue  decided  to  produce  iron  to  be  used 
with  the  ferro-nickel.  In  this  way  Clergue,  an  American 
attorney,  who  had  no  knowledge  of  the  iron  and  steel  in- 
dustry, and  was  associated  with  other  enterprises  not  con- 
spicuously successful,  found  his  way  into  the  iron  and  steel 
industry  of  Canada. 

Mr.  Clergue  had  unbounded  imagination,  initiative,  and 
confidence.  These  qualities  first  appeared  in  the  formation 
of  the  Consolidated  Lake  Superior  Company  in  1899,  with 
a  capital  of  $20,000,000  to  acquire  and  develop  already 
partially  developed  water  powers,  along  with  other  indus- 
tries at  Sault  Ste.  Marie*  Later  in  the  year  the  capital 
stock  of  the  Consolidated  Lake  Superior  Company  was 

1  Monetary  Times,  vol.  l,  p.  139.         ^  Ibid.,  vol.  u,  p.  706. 

'  Canadian  Engineer,  vol.  x,  pp.  15-20. 

*  Commercial  and  Financial  Chronicle,  vol.  lxvii,  p.  1075. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    213 

increased  to  $35,000,000  of  preferred  stock  and  $82,000,000 
of  common  stock.  This  was  supposed  to  be  justified  in  part 
by  a  re-appraisal  of  the  Helen  Mine.^ 

By  1900  ore  was  being  shipped  from  the  Helen  Mine  to 
Hamilton,  Midland,  Ontario,  and  to  the  United  States,^  and 
2000  tons  a  day  were  being  mined.  Since  the  water  freight 
rates  were  low,  and  a  40  cent  duty  was  levied  on  iron  ore 
entering  the  United  States,^  there  was  talk  of  shipments  to 
Europe.  When,  however,  Clergue's  request  was  granted 
that  in  all  future  subsidies  to  railways  there  should  be  a 
provision  that  the  railways  should  use  Canadian-made 
rails,  and  when  in  1901  the  Government  gave  Clergue  a 
large  order  for  rails  at  an  extraordinary  price,  the  building 
of  a  mill  for  the  production  of  steel  rails  was  immediately 
planned.^ 

In  April,  1901,  the  Algoma  Steel  Company  was  formed, 
as  a  subsidiary  of  the  Consolidated  Lake  Superior  Com- 
pany, to  manufacture  and  trade  in  iron  and  steel  and 
products  thereof,  charcoal,  coke,  and  by-products,  and  to 
build  bridges,  cars,  locomotives,  steamships,  and  other 
structures.^  In  May  contracts  were  let  for  the  erection  of  a 
$10,000,000  plant.^  Two  charcoal  and  two  coke  furnaces 
were  begun,  but  subsequently  work  on  the  coke  furnaces 
was  suspended.'  A  large  number  of  men  were  employed  in 
the  construction  of  railways,  ore  docks  and  a  machine  shop, 
and  in  exploration.  ^  New  iron  deposits  were  discovered 
twenty  miles  north  of  the  "Soo."  A  charcoal  plant,  to  sup- 
ply fuel,  was  put  up  near  the  blast  furnaces,  and  ovens 
were  built  to  treat  the  by-products.  It  was  expected  that  a 
coke  plant  would  be  erected  to  treat  coal  brought  up  from 

^  Commercial  and  Financial  Chronicle,  vol.  Lxxn,  p.  938. 

^  Canadian  Mining  Review,  vol.  xx,  p.  113. 

'  Commercial  and  Financial  Chronicle,  vol.  Lxxi,  p.  912. 

*  Morang's  Register,  1901,  pp.  99-102.  ^  Ibid.,  p.  39. 

*  Monetary  Times,  vol.  xxxrv,  p.  1513. 

'  Canadian  Mining  Manual,  1903,  p.  xvii. 
^  Monetary  Times,  vol.  xxxv,  p.  459, 


214    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ports  on  Lake  Erie.  Steel  works  of  the  most  modern  de- 
scription, consisting  of  two  Bessemer  converters,  a  bloom- 
ing mill,  and  a  rail  mill,  were  built.  A  railway  line  also 
was  constructed  from  the  Helen  Mine  to  Michipicoten 
Harbor.  The  company  had  a  fleet  of  steamers,  which 
made  semi-weekly  trips  from  the  Toledo  district  to  the 
"Soo"  and  Michipicoten,  carrying  iron  ore,  coal,  and  pig 
iron. 

The  Bessemer  steel  mill  was  opened  in  February,^  and 
steel  rails  were  rolled  in  May,  1902. ^  The  plant,  thoroughly 
equipped  in  a  modern  way,  was  capable  of  producing  daily 
600  tons  of  Bessemer  steel  ingots  and  100  tons  of  rails. 
Labor  cost  was  at  a  minimum,  because  of  the  use  of  low- 
cost  electric  power  on  almost  every  machine.  The  mining 
operations  of  the  company,  yielding  large  profits  from  the 
mining,  transportation,  and  sale,  were  probably  the  most 
encouraging.^  Pending  the  completion  of  the  blast  fur- 
naces, pig  iron  was  piu-chased  in  the  open  market  at  low 
prices,  chiefly  from  the  new  Midland  Furnace,*  but  it  was 
expected  that  the  completion  of  the  furnaces  would  give 
the  company  its  own  supply  at  a  cost  lower  than  market 
prices,  especially  if  the  bounty  on  pig  iron  were  deducted 
from  the  actual  cost.^  In  1902  the  Algoma  Tube  Works 
was  incorporated  to  manufacture  metallic  tubes  under  a 
special  patent  from  material  to  be  secured  from  the  other 
departments.® 

In  December,  1902,  the  works  were  suddenly  closed 
down.  Clergue  had  failed  to  secure  protection  for  steel 
rails,  and  MacKenzie  and  Mann,  of  the  Canadian  North- 
ern Railway,  had  bought  steel  rails,  far  below  the  regular 
price,  from  German  manufacturers,  who  were  said  to  be 
attempting  to  cut  off  the  competition  of  the  Canadian  firm 

1  Monetary  Times,  vol.  xxxv,  p.  1144.  ^  Ibid.,  p.  924. 

'  Canadian  Mining  Review,  vol.  xxi,  p.  301. 
*  Iron  and  Coal  Trades  Review,  vol.  Lxm,  pp.  1409-10. 
^  Commercial  and  Financial  Chronicle,  vol.  lxxv,  p.  683. 
^  Monetary  Times,  vol.  xxxv,  p.  840. 


THE  RECENT   HISTORY  OF  THE  INDUSTRY    215 

by  dumping  their  surplus  output  in  Canada.^  Moreover, 
while  experts  had  been  consulted  as  to  the  possibility  of 
making  steel  rails  from  Helen  Mine  ore,  it  had  turned  out 
not  to  be  Bessemer  ore,  and  consequently  ore  had  to  be 
obtained  from  the  Mesaba  Range  in  Minnesota,  and  from 
the  Josephine  Mine,  north  of  Michipicoten.^  Open-hearth 
furnaces  seemed  necessary  if  the  Helen  Mine  ore  was  to  be 
used,^  or  else  the  ore  would  have  to  be  shipped  abroad  in 
exchange  for  Bessemer  ore.^  Yet  contracts  for  rails  were 
available.  The  Ontario  Government  tendered  a  contract 
for  rails  for  the  Temiskaming  and  Northern  Ontario  Rail- 
way at  $32  per  ton,  but  the  shortage  of  pig  iron,  due  to  the 
fact  ^  that  the  blast  furnaces  were  incomplete,  forced  the 
company  to  decline  the  contract. 

It  seemed  absurd  that  the  Consolidated  Lake  Superior 
Company  should  have  to  close  down  when  $28,000,000  had 
been  spent  on  plants  of  the  best  and  most  modern  character, 
but  it  was  actually  impossible  to  find  enough  money  dur- 
ing this  period  of  financial  stringency  to  pay  off  a  loan  of 
$5,050,000  to  Messrs.  Speyer  and  Company  of  New  Y'ork.^ 
In  July,  1903,  a  plan  to  issue  $5,000,000  of  thirty-year  four 
per  cent  bonds  failed,  owing,  it  is  said,  to  efforts  of  capi- 
talists connected  with  the  United  States  Steel  Corpora- 
tion, and  the  plant  was  closed  down,  throwing  3500  men 
out  of  employment.^  Arrangements  were  made  immedi- 
ately for  the  payment  of  the  men  through  the  mediation 
of  the  Ontario  Government.^ 

A  reorganization  of  the  company's  finances  was  abso- 
lutely necessary.  As  can  easily  be  seen,  it  was  grossly  over- 
capitalized, with  all  expenditures  made  from  the  proceeds 
of  the  bond  issues.   A  new  company,  the  Lake  Superior 

^  Industrial  Canada,  vol.  m,  p.  235. 

'  Iron  Age,  vol.  lxxi.  May  17,  p.  9.  »  Ibid.,  April  16,  p.  34. 

*  Ibid.,  June  11,  p.  14.  ^  Monetary  Times,  vol.  xxvi,  p.  1086. 

^  Ibid.,  vol.  XXXVII,  p.  380. 

'  Canadian  Annual  Review,  1903,  pp.  512-15. 

8  Monetary  Times,  vol.  xxx\^I,  p.  419. 


216    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Corporation,  was  formed  with  a  capital  of  $40,000,000 
common  stock,  which  was  exchanged  for  the  stock  of  the 
old  company,  in  the  proportion  of  one  share  of  new  stock 
for  two  shares  of  preferred  and  four  shares  of  common 
stock  of  the  old  company.  Income  bonds  to  the  amount  of 
$3,000,000  at  5  per  cent,  to  compensate  each  shareholder 
for  the  payment  of  $3  per  share  for  each  share  exchanged, 
and  $10,000,000  of  first  mortgage  5  per  cent  bonds,  which 
were  sold  with  a  stock  bonus  of  30  per  cent,  were  also  is- 
sued.^ Mr.  Clergue  was  succeeded  as  general  manager  by 
Mr.  Cornelius  Shields,  who  had  been  general  manager  of  the 
Dominion  Iron  and  Steel  Company.^ 

In  1904  arrangements  were  made  for  the  sale  of  the 
Helen  Mine  ore  and  for  the  purchase  of  Bessemer  ore  in 
Minnesota.'  The  Josephine  Mine  was  also  tested  more  care- 
fully.'* Contracts  for  rails  and  other  products  began  to 
come  in,  and  by  December  nearly  all  departments  were 
being  fully  operated.^ 

The  year  1905  was  one  of  general  rejuvenation.  Iron- 
ore  mining  was  extensive,  and  railroad  building  was  pushed 
forward.^  The  Lake  Superior  Power  Company,  the  last 
to  remain  in  the  hands  of  the  receiver,  was  released  and 
came  under  the  full  control  of  the  Lake  Superior  Company.^ 
The  car  shops  were  reopened  for  the  repair  of  freight  and 
box  cars  for  the  Canadian  Pacific,  the  Algoma  Central,  and 
the  Temiskaming  and  Northern  Ontario  Railways.^  There 
were  large  orders  for  rails  —  152,000  tons  in  all  —  for  the 
Canadian  Pacific,  Canadian  Northern,  Michigan  Central, 
Grand  Trunk,  and  the  Intercolonial  Railways.^  Contracts 
were  let  for  new  open-hearth  furnaces  of  200  tons'  capac- 
ity, each  to  use  more  Helen  Mine  ore.^"    As  the  steel-rail 

*  Monetary  Times,  vol.  xxxvn,  p.  1181.     ^  Ibid.,  vol.  xxxvi,  p.  1384. 

3  Canadian  Mining  Review,  vol.  xxiii,  p.  143.         *  Ibid.,  p.  100. 

^  Monetary  Times,  vol.  xxxviii,  p.  714. 

^  Iron  Age,  vol.  lxxv,  p.  371. 

'  Monetary  Times,  vol.  xxxix,  p.  474.  ^  Ibid,  p.  19. 

8  Ibid.,  p.  53.  1°  Iron  Age,  vol.  lxxvi,  p.  1168. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    217 

mill  was  using  more  pig  iron  than  was  produced  by  the  char- 
coal furnace,  the  output  of  pig  iron  had  to  be  supple- 
mented by  that  of  a  furnace  at  Midland.  In  1906  and  1907 
the  company  built  new  coke  ovens,  ^  and  decided  to  build 
new  coke  blast  furnaces  and  steel  furnaces  to  keep  the 
finishing  mills  supplied  with  raw  materials. ^  New  records 
were  made  in  the  output  of  the  steel-rail  mill.^  The  year 
1908  was  less  favorable.  As  raUroad  building  was  some- 
what curtailed,  orders  for  rails  were  not  forthcoming  and 
prices  were  low.*  The  company  had  to  close  down  for  a 
time,  but  it  took  the  opportunity  to  improve  the  rail  mill.^ 
Late  in  the  year  the  mill  was  set  in  operation  again  to  fill 
a  rush  order  for  rails  for  the  Grand  Trunk  Pacific  Railway.^ 
The  coke  blast  furnaces  which  had  just  been  completed 
were  blown  in.^ 

Since  1908  there  has  been  regular  and  energetic  develop- 
ment. In  1909  and  1910  control  of  the  company  passed  to 
British  and  Canadian  interests,  and  to  Dr.  F.  S.  Pearson, 
of  New  York.  Additions  of  capital  were  made  for  the  con- 
struction of  plants  to  turn  the  power  to  more  productive 
account.^  Business  was  fairly  good  in  1909  and  1910,^  and 
rails  were  sold  even  to  the  New  York  Central  Railroad. 
While  the  rail  mill  was  pushed  to  its  utmost  capacity,^'' 
the  steel  works  received  special  attention.  The  blast  fur- 
naces were  extended  to  keep  pace  with  the  rail  mill  and 
open-hearth  furnaces. ^^  As  the  new  furnaces  were  de- 
signed to  use  Helen  Mine  ore,  the  company  refused  to  sell 
the  ore.  A  limestone  quarry  in  Michigan  was  purchased 
and  docks  and  ore-handling  machinery  were  installed.  ^- 

^  Monetary  Times,  vol.  XL,  p.  1318.      ^  Iron  Age,  vol.  lxxix,  p.  1732. 
'  Monetary  Times,  vol.  xxxix,  p.  13Sd4. 

*  Iron  Age,  vol.  lxxxi,  p.  1406.  ^  Ibid.,  p.  293. 
^  Canadian  Mining  Journal,  vol.  xxix,  p.  489. 

^  Iron  Age,  vol.  Lxxxii,  p.  707. 

*  Financial  Post,  January  23,  1909,  p.  11. 

9  Ibid.,  December  24,  1910,  p.  1.  "  Ibid.,  July  30,  1910,  p.  9. 

11  Iron  Age,  vol.  lxxxiii,  p.  1213. 

"  Canadian  Mining  Journal,  vol.  xxxi,  p.  610. 


218    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

In  June,  1910,  the  Cannelton  Collieries  of  West  Virginia 
were  purchased  in  order  to  make  the  company  independent 
in  its  requirements  of  raw  materials.  Coal  areas  of  6000 
acres  were  operated  by  the  Cannelton  Coal  and  Coke  Com- 
pany, whose  stock  is  owned  outright  by  the  Lake  Superior 
Corporation.^  No  less  than  110  new  by-product  Koppers 
coke  ovens  were  built,  and  the  mines  were  worked  vigor- 
ously.^ In  1911  the  Algoma  Steel  Corporation  built  an 
18-inch  merchant  mill,  a  12-inch  merchant  mill,  to  produce 
track  fastenings,  and  installed  many  other  improvements.^ 
Of  $10,000,000  spent  between  1909  and  1911,  $7,300,000 
was  spent  on  the  steel  branch  and  $3,000,000  on  lime- 
stone and  coal  properties.  The  Magpie  Iron  Mine  near 
Michipicoten,  leased  in  1909,  was  purchased  outright  in 
1911." 

In  1911  and  1912  a  35-inch  blooming  mill,  a  28-inch  rail 
mill,  a  350-ton  tilting  melting  furnace  for  the  open-hearth 
department,  three  40-ton  open-hearth  furnaces,  a  500-ton 
blast  furnace,  and  a  coal-handling  plant,  were  added  to  the 
equipment.^  In  1913  the  company  purchased  sixty-three 
acres  of  land  for  proposed  extensions,  which  included  an- 
other blast  furnace,  another  steel-rail  mill,  an  open-hearth 
plant,  coke  ovens,  blooming  mills,  and  a  merchant  mill,^ 
and  storage  facilities  for  limestone  and  pig  iron.  Additional 
open-hearth  furnaces,  the  enlargement  of  the  ore  roasting 
plant  at  the  Magpie  Mine,  and  the  building  of  a  merchant 
mill  for  the  production  of  heavy  structural  steel,  were  com- 
pleted in  1914.7 

The  Lake  Superior  Corporation  is  to-day  one  of  Canada's 
largest  iron  and  steel  producing  companies.  Besides  being 
the  first  company  to  produce  steel  rails  in  Canada,  it  led 

^  Canadian  Mining  Journal,  vol.  xxxi,  p.  477. 

*  Iron  Age,  vol.  lxxxiii,  p.  1213.  ^  Ibid.,  vol.  lxxxix,  p.  101. 

*  Monetary  Times,  vol.  xlvii,  p.  1618. 
6  Iron  Age,  vol.  lxxxix,  p.  101. 

^  Monetary  Times,  vol.  L,  pp.  319  and  292. 
^  Ibid.,  vol.  LI,  p.  252. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    219 

in  the  production  of  other  articles,  such  as  heavy  and  light 
structural  material.  The  company  has  always  followed 
a  policy  of  installing  only  the  best  and  most  up-to-date 
machinery;  in  fact,  it  has  even  taken  the  initiative  in  design- 
ing and  installing  machinery  used  nowhere  else  in  America. 
The  plant  is  operated  so  far  as  possible  by  electric  power, 
of  which  the  corporation's  own  power  plant  supplies  an 
abundance.  Altogether  the  works  at  Sault  Ste.  Marie  are 
one  of  Canada's  largest  enterprises,  and  had  it  not  been 
for  the  financial  failures  of  F.  H.  Clergue,  they  would  no 
doubt  have  had  as  great  success  in  the  past  as  conditions 
seem  to  warrant  us  in  expecting  in  the  future. 

§  6.  The  early  development  of  the  Hamilton  Blast  Fur- 
nace Company,  which  was  well  under  way  by  1897,  has 
already  been  considered.  In  1899  this  company  and  the 
Ontario  Rolling  Mills  Company  were  amalgamated  as  the 
Hamilton  Steel  and  Iron  Company.  The  finishing  plant 
was  to  furnish  an  outlet  and  market  for  the  less  finished 
product  of  the  other  company.^  The  latter  was  securing  the 
Ontario  trade  among  foundries,  and  it  had  a  market  even 
in  Quebec,  as  the  iron  produced  had  an  excellent  reputa- 
tion and  the  Ontario  and  Dominion  bounties  were  a  con- 
siderable help  in  marketing  at  proper  prices, ^  At  first,  ores 
from  the  Lake  Superior  district  were  used,  but  a  consider- 
able amount  of  ore  was  brought  from  Renfrew  County,  and 
large  quantities  of  ore  were  shipped  from  the  mine  to 
Hamilton.'  In  1899  about  27  per  cent  of  the  ore  used  was 
mined  in  Ontario.*  The  Hamilton  Iron  Mining  Company, 
a  subsidiary,  was  operating  a  deposit  at  Desbarats  on  the 
"Soo"  branch  of  the  Canadian  Pacific  Railway.^  In  1899 
the   Equitable   Mining   and   Developing   Company   was 

^  Industrial  Canada,  vol.  ii,  p.  331. 

^  Iron  Age,  vol.  lx,  August  5,  p.  12. 

'  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  197. 

*  Journal  of  the  Iron  and  Steel  Institute,  1900,  no.  1,  p.  453. 

^  Iron  and  Coal  Trades  Review,  vol.  lx,  p.  1133. 


220    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

formed  to  mine  iron  ores  of  eastern  Ontario  on  a  contract 
with  the  Hamilton  Steel  and  Iron  Company.^ 

This  new  company  soon  decided  to  build  a  large  steel 
plant  to  use  some  of  the  pig  iron  not  suitable  for  foundry 
purposes,  together  with  scrap  iron,  collected  throughout 
western  Ontario.^  Several  15-ton  basic  open-hearth  fur- 
naces were  built  in  1900.  After  this  the  concern  flourished.' 
A  new  250-ton  blast  furnace  was  built  in  1907  to  supply 
a  large  amount  of  iron  to  consumers  in  Hamilton.*  The 
production  of  railway  spikes,  for  which  there  was  a  great 
demand,  was  also  begun  in  the  same  year.^  The  Hamilton 
Iron  and  Steel  Company  was  formed  to  take  over  the  prop- 
erties of  the  old  company,  and  the  capitalization  was 
increased  from  $1,513,000  to  $3,000,000.^  Since  1907  the 
company  has  extended  its  spike  mill,^  and  has  built  new 
bolt  and  bar  mills.^  In  1910  $400,000  spent  on  a  process  for 
treating  ores  reduced  the  cost  of  smelting  to  seventy-five 
cents  per  ton.^ 

In  1910  the  Steel  Company  of  Canada  was  formed  to 
amalgamate  the  Hamilton  Iron  and  Steel  Company  with 
the  Montreal  Rolling  Mills  Company,  the  Canada  Screw 
Company,  the  Dominion  Wire  Manufacturing  Company, 
and  the  Canada  Bolt  and  Nut  Company.  In  1911  the  in- 
creased demands  for  the  products  of  the  company  required 
the  addition  of  machinery,  equipment  at  various  plants, 
a  blooming  mill,  a  rod  and  bar  mill  at  Hamilton,  and  two 
more  50-ton  open-hearth  furnaces,  which  were  put  in  opera- 
tion in  the  autumn  of  1912.^° 

In  1911  the  company  had  to  meet  severe  competition 
from  the  United  States.  Although  the  demand  for  the 
output  was  large,  an  abnormal  amount  of  iron  was  sup- 

1  Monetary  Times,  vol.  xxxii,  p.  433. 

2  Iron  Age,  vol.  lxii,  December  15,  p.  12. 

*  Industrial  Canada,  vol.  ii,  p.  331.  ^  Ibid.,  vol.  xi,  p.  815. 

^  Ibid.,  vol.  XII,  p.  797.  ^  Iron  Age,  vol.  lxxxi,  p.  293. 

^  Industrial  Canada,  vol.  ix,  p.  38.      *  Iron  Age,  vol.  lxxxiv,  p.  149. 
s  Monetary  Times,  vol.  XLiv,  p.  1114.     ^°  Ibid.,  vol.  xlviii,  p.  1625. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    221 

plied  by  United  States  producers  at  exceptionally  low 
prices.  The  price  of  bars  was  so  low  that  only  the  largest 
plants  in  the  United  States  could  produce  them  at  a  cost 
which  would  give  even  a  meager  margin  of  profit.  Prices 
of  pig  iron  were  still  worse.  As  pig  iron  was  sold  below  the 
average  furnace  cost,  few,  if  any,  American  furnaces  made 
money,  and  the  prices  for  export  to  Canada  were  cut  below 
those  for  the  American  market.  The  company  also  had  to 
face  conditions  created  by  the  fact  that  iron  used  for  the 
manufacture  of  agricultural  machinery  enters  Canada  al- 
most free  of  duty.  This  practically  prohibited  implement 
makers  from  purchasing  any  Canadian  iron.  In  spite  of 
this  difficulty,  the  company,  by  selling  goods  at  a  small 
profit  (in  comparison  with  mills  which  made  little  or  no 
money),  was  able  to  run  the  plant  at  full  capacity  and  to 
secure  the  greatest  economy.  The  improvements  and  addi- 
tions permitted  the  production  of  bars  at  a  cost  lower  than 
before.^  In  1913  a  wire  plant,  capable  of  producing  150 
tons  a  day,  was  built  at  Fort  William,  and  nail  works  are 
now  being  built  at  the  same  place.'^ 

Of  the  constituent  companies  entering  the  Steel  Company 
of  Canada  the  second  in  importance  was  the  Montreal 
Rolling  Mills  Company,  a  long-established  firm,  which 
owned  and  operated  three  plants  in  the  heart  of  the  manu- 
facturing district  of  Montreal.^  In  1903  this  company,  find- 
ing itself  in  a  satisfactory  condition,^  purchased  the  entire 
properties  of  the  Pillow-Hersey  Company  of  Montreal  for 
$600,000,^  and  built  a  new  wire-nail  plant  with  an  output 
of  100,000  kegs  of  nails  per  year.^  In  1906  the  property  of 
the  Hodgson  Iron  and  Tube  company  was  purchased,  and 
a  butt  weld  pipe  mill  was  constructed.^  The  company  has 

^  Annual  Report,  1912.        *  Iron  Age,  vol.  xci,  p.  1526. 

'  Ames's  Circular,  November  27,  1911. 

*  Monetary  Times,  vol.  xxxvi,  p.  1049. 

^  Iron  Age,  vol.  lxxi.  May  29,  p.  20. 

6  Monetary  Times,  vol.  xxxvii,  p.  533. 

^  Iron  Age,  vol.  lxxvi,  p.  268. 


222    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

excellent  shipping  facilities  by  rail  and  water  and  the  plant 
and  buildings  are  all  modern  and  well  equipped.^ 

The  plant  of  the  Canada  Screw  Company  is  located  on 
eight  acres  in  the  center  of  the  city  of  Hamilton.  It  has 
all  necessary  railway  connections,  modern  buildings  and 
equipment.  The  plant  of  the  Dominion  Wire  Manufac- 
tiu*ing  Company,  of  Lachine,  Quebec,  a  suburb  of  Mon- 
treal,^ built  in  1906,  comprises  an  open-hearth  furnace,  a 
blooming  mill,  and  a  combined  rod  and  wire  mill.^  The 
Canada  Bolt  and  Nut  Company,  established  in  1910,  was 
a  consolidation  of  companies  owning  plants  in  Toronto, 
Brantford,  Belleville,  and  Gananoque. 

All  the  plants  of  the  Steel  Company  of  Canada  are 
modern,  well  equipped,  and  situated  at  strategic  transport- 
ation points.  The  output  consists  of  pig  iron,  open-hearth 
steel,  bar  iron  and  steel,  shapes,  forgings,  locomotive  and 
car  wheels,  bolts,  nuts,  rivets,  horseshoes,  wrought-iron 
pipe  and  fittings,  wire  and  cut  nails,  tacks  and  screws, 
wire,  etc.  With  the  exceedingly  efficient  management  not 
only  of  the  general  enterprise,  but  also  of  the  various 
branches,  the  future  of  the  company  seems  assured.^ 

§  7.  Another  important  advance  was  made  in  the  Ca- 
nadian iron  industry  by  the  Drummond  interests  of  Mon- 
treal when,  in  1899,  the  Canada  Iron  Furnace  Company 
accepted  Midland's  offer  of  $50,000,  along  with  ten  years 
of  tax  exemption,  if  the  company  would  build  a  blast  fur- 
nace at  Midland.  Midland  was  regarded  as  a  good  site, 
since  it  had  the  best  harbor  on  Georgian  Bay,  where  ore 
can  be  seciu'ed  at  low  cost  from  Hastings  County  or  by 
water  from  Lake  Superior  ore  mines,  such  as  the  Helen 
Mine.^   The  capital  of  the  Canadian  Iron  Furnace  Com- 

*  Ames's  Circular,  November  27,  1911.  *  Ibid. 
'  Monetary  Times,  vol.  XL,  p.  195. 

*  Ames's  Circular,  November  27,  1911. 

^  Iron  Age,  vol.  LXiii,  February  23,  p.  15. 


THE  RECENT   HISTORY  OF  THE  INDUSTRY    223 

pany  was  increased  from  $300,000  to  $1, 000,000.  ^  A  fur- 
nace of  125  tons'  daily  capacity  was  built  on  a  splendid 
water-front  property  opposite  the  town.  Docks  were  fitted 
up  with  modern  ore  elevators  to  deliver  materials  directly 
to  the  stock  house. ^ 

It  had  been  the  original  intention  of  the  company  to 
manufacture  charcoal  iron,  to  be  used  in  the  manufacture 
of  car  wheels  in  the  works  controlled  by  those  interested  in 
the  Canadian  Iron  Furnace  Company,^  but  cordwood  rose 
so  rapidly  in  price  that  the  management  soon  decided  to 
purchase  Connellsville  coke  as  fuel.  A  large  quantity  of 
the  Helen  Mine  ore  was  used  for  some  years,  but  more  re- 
cently the  product  has  been  Bessemer  iron  made  from  ore 
secured  from  the  Lake  Superior  region,  the  Mineral  Iron 
Range  Mining  Company  at  Bessemer,  Hastings  County,* 
and  from  the  Radnor  Mine,  Renfrew  County,  Ontario.^ 
For  the  time  prospects  looked  so  bright  that  in  1909  to 
1910  a  new  250-ton  blast  fiu'nace  was  built  at  Midland,® 
but  the  company  has  since  got  into  financial  difficulty,  due 
partially  to  the  second  furnace  overreaching  opportunities. 

The  second  venture  of  the  Drummond  interests  was  the 
purchase  of  the  plant  of  the  Londonderry  Iron  Company  in 
1902.  The  Londonderry  works  had  been  closed  down '  in 
1898  because  modem  discoveries  and  inventions  had  ren- 
dered the  plant  obsolete,  and  it  was  no  longer  profitable  to 
carry  on  the  works  in  their  old  form.^  In  1899  the  plant, 
including  mineral  lands,  blast  furnaces,  a  rolling  mill, 
foundries,  coke  ovens,  a  railway  and  rolling  stock,  machin- 
ery, and  the  Chignecto  Colliery  at  Maccan  were  sold  to 

^  Monetary  Times,  vol.  xxxiv,  p.  360. 

*  Indxistrial  Canada,  vol.  li,  p.  339. 

^  Iron  Age,  vol.  lxxiii,  February  23,  p.  15. 

*  Ontario,  Report  of  Bureau  of  Mines,  1908,  pp.  197-98. 
^  Jeans,  op.  cit.,  p.  108. 

^  Canadian  Mining  Journal,  vol.  xxxi,  p.  610. 

'  Ibid.,  vol.  XVIII,  p.  56. 

^  Monetary  Times,  vol.  xxxiii,  p.  618. 


224    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Mr.  H.  S.  Holt  for  $153,000.  ^  Meanwhile  the  foundry  was 
operated  by  Drummond,  McCall  and  Company,  for  the 
manufacture  of  water  pipe.  As  the  Drummond  people 
were  looking  for  a  suitable  site  in  Nova  Scotia  for  such  a 
foundry,  they  decided  to  purchase  the  whole  plant,^  and 
in  1902  formed  the  Londonderry  Iron  and  Mining  Company 
to  acquire  these  properties  and  to  enter  upon  the  manu- 
factiu-e  of  a  high-grade  foundry  pig  iron.^ 

In  1903  the  plant  was  remodeled  and  placed  in  first-class 
shape.^  One  furnace  was  completely  rebuilt.^  An  excel- 
lent laboratory,  repair  shops,  car  shops,  machine  room, 
blacksmith  forge,  office  buildings,®  and  a  new  casting 
house  were  added,  and  the  cold  blowing  engines  were  fully 
repaired.  The  second  and  smaller  furnace  was  pulled  down.' 

In  1904  the  furnace  was  put  in  operation,^  and  ore  de- 
posits at  Torbrook  were  purchased  and  shipments  to  Lon- 
donderry begun.^  As  a  mixture  of  local  and  Torbrook  ore 
is  reasonably  free  of  phosphorus  and  sulphur,  and  as  the 
Torbrook  red  hematites  often  contain  enough  limestone  to 
be  self-fluxing,  the  combination  produced  splendid  foundry 
iron.^°  In  1905  a  new  company,  the  Annapolis  Iron  Min- 
ing Company,  was  incorporated  to  operate  the  Torbrook 
Mines,  and  sell  the  output  to  the  Londonderry  company. 
Practically  the  same  interests  were  concerned  in  the  two 
companies.  ^^ 

The  furnace  and  plant  were  out  of  operation  late  in  1907, 
owing  to  the  lack  of  supply  of  coke  and  the  cutting  of 

^  Monetary  Times,  vol.  xxxiii,  p.  618. 

*  Iron  Age,  vol.  lxx,  October  2,  p.  16. 

'  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  427. 

*  Monetary  Times,  vol.  xxxrva,  p.  427. 

6  Canadian  Mining  Manual,  1903,  p.  47. 

^  Canadian  Mining  Journal,  vol.  xxviii,  p.  71. 

7  Ibid. 

8  Monetary  Times,  vol.  xxxvii,  p.  903. 

9  Canadian  Mining  Review,  vol.  xxiii,  p.  204. 
»"  Ibid.,  vol.  xxvrn,  p.  72. 

*i  Canada,  Report  of  Mining  and  Metallurgical  Industries,  pp.  524-26. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    225 

prices  in  pig  iron,^  but  the  foundry  operations  were  re- 
newed in  1909.2  jjj  1909  the  furnace  using  some  ore  from 
Bathurst,  New  Brunswick,  was  started  up  again. ^  The 
Drummond  people  had,  in  the  mean  time,  developed  the 
iron  mines  in  Gloucester  County,  near  Bathurst,  by  instal- 
ling a  plant  to  raise  2000  tons  per  day,  and  by  building  a 
railway  connecting  the  mines  with  the  Intercolonial  Rail- 
way at  Newcastle.^  Since  a  deposit  of  coal  was  found  near 
the  mines, ^  the  erection  of  a  blast  furnace  at  Bathurst  was 
discussed.^  The  ore  beds  were  mined  and  contracts  were 
made  for  the  shipment  of  60,000  tons  in  1912,  and  200,000 
tons  in  1913,  to  Philadelphia.  In  1912  $100,000  was  spent 
on  a  large  concentrator  of  700  tons'  capacity,  an  ore-crush- 
ing plant,  engines,  and  a  stock-piling  equipment.'' 

Since  1910  the  Londonderry  Furnace  has  not  been  in 
operation,^  but  the  company  developed  its  Torbrook 
Mines  by  installing  mining  and  crushing  machinery  and  by 
building  shipping  docks  for  this  ore  at  Port  Wade,  Nova 
Scotia,  vnth  leading  facilities  of  2000  tons  per  hour.  The 
Torbrook  Mines  were  closed  down  in  1911,  but  ore  from 
the  stock  pile  was  concentrated  and  cargoes  shipped  as 
prices  improved,^  and  the  mines  were  reopened  in  1912.^° 

Meanwhile,  the  Drummonds  and  allied  interests  were 
involved  in  several  other  projects.  The  Canadian  Iron  and 
Foundry  Company  had  operated  car-wheel  shops  and  pipe 
foundries  at  St.  Thomas  and  Hamilton,  Ontario,  at  Lon- 
donderry, Nova  Scotia,  and  at  Montreal  and  Three  Rivers, 

^  Canadian  Mining  Journal,  vol.  xxix,  p.  96. 

^  Industrial  Canada,  vol.  viii,  p.  713. 

^  Canadian  Mining  Journal,  vol.  xxix,  p.  638. 

*  Ibid.,  vol.  xx\^II,  p.  540. 

*  Monetary  Times,  vol.  xliv,  p.  1015. 

*  Industrial  Canada,  vol.  \aii,  p.  624. 

^  New  Brunswick,  Report  of  Crown  Land  Department,  1912,  pp.  xxiv- 
xxvii. 

^  Monetary  Times,  vol.  xlix,  p.  110. 
'  Canadian  Mining  Journal,  vol.  xxxii,  p.  48. 
^°  Nova  Scotia,  Report  of  Department  of  Mines,  1912,  pp.  173-74. 


226    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Quebec.^  A  pipe  foundry  and  car- wheel  shop  had  been 
built  at  Fort  William  to  take  care  of  the  western  business 
in  piping  and  car  wheels. ^  This  plant  was  extended  in  1912 
to  permit  the  manufacture  of  more  car  wheels  for  the  new 
Port  Arthur  plant  of  the  Canadian  Car  and  Foundry  Com- 
pany.^ In  1912  the  plant  at  Three  Rivers  was  entirely  re- 
built to  manufacture  seventy-five  tons  of  water  pipe  and 
twenty-five  tons  of  castings  per  day.'* 

The  Radnor  Furnace  at  Radnor  Forges,  Quebec,  was  in 
blast  until  1911.  Charcoal  was  produced  at  ovens  at  Rad- 
nor Forges  and  Grand  Piles,  Quebec.  John  McDougall 
and  Company,  allied  interests,  have  operated  a  furnace 
at  Drummondville,  Quebec.  Only  charcoal  iron  has  been 
made  by  these  small  Quebec  furnaces.  The  output  has  been 
sold  to  the  Canadian  Pacific  Railway,  the  Rhodes  Curry 
Company,  and  the  Canada  Iron  and  Foundry  Company 
for  the  manufacture  of  car  wheels  and  cast-iron  pipe.^ 

In  1908  practically  all  these  plants  were  purchased  by 
the  Canada  Iron  Corporation.  In  1912  this  new  corpora- 
tion reported  that  "  the  business  of  the  iron  foundries  shows 
a  constant  and  very  healthy  growth  and,  despite  the  effects 
of  American  competition  on  the  profits  of  1911  to  1912,  a 
yearly  tonnage  production  is  now  obtained  from  all  de- 
partments that  insures  a  permanent  supremacy  of  the  cor- 
poration in  its  special  field  of  operation  from  foundry  pig 
iron  to  the  finished  product  of  railway  and  tramway  car 
wheels,  cast-iron  water  pipe  and  gas  pipes,  and  general 
castings.  The  demand  for  this  corporation's  products  is 
increasing  daily,  necessitating  still  further  extensions  to 
plants,  especially  at  western  points,  to  enable  pace  being 
kept  with  the  general  expansion  of  the  country.  The  cor- 
poration occupies  a  position  to  cope  with  and  take  advan- 

^  Monetary  Times,  vol.  xli,  p.  2125. 

'  Iron  Age,  vol.  lxxx,  p.  367.  '  Ibid.,  vol.  xc,  p.  228. 

*  Canadian  Mining  Journal,  vol.  xxxii,  p.  148. 

^  Canada,  Report  on  Mining  and  Metallurgical  Industries,  pp.  472-73. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    227 

tage  of  the  growing  trade  of  Canada."  ^  Nevertheless,  the 
heavy  bonded  debt  of  the  Canada  Iron  Coqjoration  forced 
it  into  insolvency  in  1913,  and  most  of  the  plants  have  been 
closed  down  pending  reorganization. 

§  8.  One  of  the  best-known  steel  firms  in  Canada  during 
the  past  decade  and  a  haK  is  the  Montreal  Steel  Works, 
which,  in  1913,  was  the  largest  producer  of  steel  castings  in 
Canada.^  As  we  have  seen,  this  company  had  been  es- 
tablished as  early  as  1883.^  The  business  went  on  very  suc- 
cessfully, sales  were  almost  always  good,  earnings  were 
high,  dividends  were  satisfactorily  paid  from  time  to  time, 
and  a  considerable  surplus  was  piled  up.  The  depression 
of  1907  to  1908  was  a  somewhat  adverse  factor,  but  not 
altogether  dangerous.^  In  1911  the  plant  consisted  of  two 
basic  open-hearth  furnaces  manufacturing  thirty  tons  of 
steel  daily  from  British  pig  iron,  Canadian  scrap  iron,  and 
some  Lake  Superior  ore.*  In  1912  a  modem  steel-castings 
plant  was  built  at  Longue  Point,  Montreal,  to  increase  the 
output  of  steel  castings  for  the  Canadian  Car  and  Foundry 
Company,®  as  well  as  for  the  general  market  of  the  country.'' 

In  1906  the  Ontario  Iron  and  Steel  Company  was  in- 
corporated vnth.  a  capital  of  $500,000  to  build  a  steel-cast- 
ings plant  and  rolling  mill  at  Welland,  Ontario,  where  na- 
tural gas,  electric  power,  and  good  transportation  facilities 
are  obtainable.^  A  plant,  including  basic  open-hearth  fur- 
naces, rolling  mills,  and  a  small  steel  foundry  to  produce 
steel  castings,  rails,  bars,  angles,  skelp,  etc.,  from  pig  iron 
bought  on  the  open  market,  was  built  in  the  years  1907  to 
1908.3  In  1911  the  Montreal  Steel  Works  and  the  Ontario 

1  Annual  Report,  1912.  *  Monetary  Times,  vol.  XLviii,  p.  2626. 

'  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  493. 
*  Financial  Post,  July  3, 1909,  p.  8. 

■^  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  463. 
^  Monetary  Times,  vol.  xlviii,  p.  2626.  ^  Ibid.,  vol.  xiv,  p.  837. 

8  Canada,  Report  on  Mining  and  Metallurgical  Industries,  pp.  335-36. 
^  Ontario,  Report  of  Bureau  oj  Mines,  1908,  p.  199. 


228    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Iron  and  Steel  Company  were  amalgamated  as  the  Cana- 
dian Steel  Foundries. 

Each  of  these  companies  had  made  sales  to  the  increasing 
number  of  car-building  firms  in  Canada.  The  rapid  ex- 
pansion of  car  building,  following  the  increase  of  traffic  and 
the  expansion  of  Canada's  railway  net,  involved  a  large  de- 
mand for  steel  castings  and  car  wheels.  When,  therefore, 
the  Canada  Car  and  Foundry  Company  was  formed  to 
amalgamate  the  Dominion  Car  Company,  the  Canada  Car 
Company,  and  the  Rhodes  Curry  Company,  which  con- 
cerns together  produced  in  1909  no  less  than  85  per  cent 
of  the  cars  built  in  Canada,  it  secured  control  of  the  Cana- 
dian Steel  Foundries  mentioned  above.  Thus,  the  Canada 
Car  and  Foundry  Company  consists  of  an  important  fin- 
ishing industry  and  a  successful  company  producing  pri- 
mary products. 

§  9.  Besides  these  more  important  iron  and  steel  enter- 
prises, we  must  consider  the  operations  of  Sir  William  Mac- 
Kenzie  and  Sir  Donald  Mann,  in  mining  iron  ore  at  Ati- 
kokan,  west  of  Port  Arthur,  and  in  manufacturing  iron 
products  in  Port  Arthur.^  Port  Arthur  agreed  to  subscribe 
to  $200,000  worth  of  bonds  of  the  Atikokan  Iron  Com- 
pany, to  provide  it  with  a  free  site  of  forty  acres,  worth 
$25,000,  to  give  it  a  twenty -year  tax  exemption,  to  close 
certain  streets,  and  to  give  a  free  right  of  way  for  a  Ca- 
nadian Northern  Railway  spur  track.  In  return,  it  was 
to  have  a  representative  on  the  board  of  directors,  and  the 
head  office  was  to  be  at  Port  Arthur.^  This  new  iron  com- 
pany was  supplemented  by  another  company,  the  Cana- 
dian Coal  and  Ore  Dock  Company,  which  built  coal  and 
ore  docks  capable  of  storing  200,000  tons  of  coal  and  100,- 
000  tons  of  ore.^ 

In  1906  to  1907  the  blast  furnace  and  other  parts  of  the 

^  Iron  Age,  vol.  lxvii.  May  30,  p.  15.        *  Ibid.,  vol.  Lxxv,  p.  317. 
•  Monetary  Times,  vol.  xxxviii,  p.  1151. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    229 

plant  were  built.  The  mine  was  equipped  with  high-class 
machinery,  and  connected  with  the  Canadian  Northern 
Railway  by  a  six-mile  spur  line.^  Since  the  ore  was  some- 
what sulphm-ous  and  needed  roasting,  a  roasting  furnace 
was  added.^  The  installation  of  the  blast  furnace  at  Port 
Arthur  was  very  costly  because  a  large  portion  of  the  cost 
was  sunk  in  securing  a  suitable  foundation  for  docks,  coke 
ovens,  and  the  furnace.  The  point  chosen  for  building  was 
low  and  marshy,  really  a  deposit  of  a  great  depth  of  al- 
luvial mud,  carried  down  by  the  Kaministikwia  River. 
The  company  decided  to  construct  its  plant  over  the  bay 
rather  than  dredge  a  channel  to  their  docks.'  One  hundred 
coke  ovens  were  built  on  a  pier  running  out  to  deep  water. 

In  September,  1907,  the  furnace  was  put  in  operation,^ 
and  in  November  2000  tons  of  pig  iron  were  shipped  to 
Sault  Ste.  Marie.^  Satisfactory  results  were  obtained  from 
the  furnace,  which  produced  100  tons  of  excellent  pig  iron 
per  day  from  Canadian  ore.^ 

Since  the  industrial  depression  of  1907  to  1908  fell  with 
special  weight  on  most  of  the  iron  and  steel  interests,  the 
Atikokan  Company  had  entered  on  its  production  at  a 
most  unfortunate  time.  Instead  of  piling  up  stocks  of  pig 
iron,  the  company  closed  down  the  plant  until  conditions 
should  be  less  adverse.'  It  had  been  expected  that  the 
works  would  start  up  in  1908,  but  as  time  passed  on  with- 
out the  renewal  of  operations,  and  as  fixed  charges  could 
not  be  met,  MacKenzie  and  Mann  asked  for  a  winding-up 
order,^  which  was  withdrawn  when  the  shareholders  got 
sufficient  capital  to  pay  the  claims.^ 

Under  the  new  management  ^°  of  J.  D.  Fraser,  of  the 

*  Monetary  Times,  vol.  xxxix,  p.  982. 

*  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  69. 
'  Industrial  Canada,  vol.  viii,  p.  95.        *  Ibid. 

^  Iron  Age,  vol.  lxxx,  p.  1403.  ^  Ibid.,  p.  699. 

^  Ibid.,  vol.  Lxxxi,  p.  845.  ^  Ibid.,  vol.  Lxxxn,  p.  774. 

'  Ibid.,  vol.  Lxxxv,  p.  291. 

^°  Ontario,  Report  of  Bureau  of  Mines,  1909,  p.  84. 


230    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Dominion  Iron  and  Steel  Company,^  the  iron  plant  was 
considerably  overhauled  after  eighteen  months  of  disuse 
and  many  improvements  were  installed, ^  With  prices  for 
iron  favorable  and  orders  coming  in,^  the  plant  was  re- 
opened in  August,  1909>  In  1910  more  ore  was  roasted 
than  was  used,  and  some  of  it  was  sold.^  In  1911  a  large 
cast-iron  pipe  and  car-wheel  foimdry  was  added  to  em- 
ploy much  of  the  pig  iron  produced  at  the  furnace,  and  the 
enlargement  of  the  furnace  or  the  building  of  a  second 
blast  furnace  was  seriously  considered.^  In  1913  the  firm 
decided  to  build  a  wedge-type  roasting  furnace  J  As  early 
as  1906  the  erection  of  steel  works  was  contemplated,^ 
and  m  1912  there  was  talk  of  a  $5,000,000  steel  plant  m- 
cluding  blast  furnaces,  rolling  mills,  steel-raU  mills,  mer- 
chant mills,  bar  mills,  ore  and  coal  docks,  etc.,  evidently 
to  make  use  of  ore  from  both  the  Atikokan  Range  and  the 
Moose  Mountain  Range,  but  as  yet  nothing  of  this  nature 
has  been  accomplished.^ 

In  1905  the  vast  deposits  of  iron  ore  at  Moose  Moun- 
tain, Ontario,  amoimting  to  some  100,000,000  tons  of  fair 
quality  magnetite,  low  in  phosphorus,  and  of  excellent 
furnace  texture,^"  were  sold  to  MacKenzie  and  Mann  and 
American  interests.^^  Since  the  Canadian  Northern  Rail- 
way gave  a  direct  connection  with  Lake  Huron  or  Georgian 
Bay,  some  eighty  miles  away,  the  likelihood  of  profitable 
results  from  mining  seemed  good.  Iron  ore  could  be  shipped 
cheaply  to  the  Lake;  the  water  route  to  Lake  Erie  would  be 
shorter  than  from  Minnesota,  and  the  navigation  of  the 
"  Soo  "  locks  would  be  avoided.  ^^ 

'  Canadian  Mining  Journal,  vol.  xxx,  p.  45. 

2  Iron  Age,  vol.  lxxxiv,  p.  277. 

^  Canadian  Mining  Jmirnal,  vol.  xxx. 

*  Iron  Age,  vol.  lxxxiii,  p.  491. 

^  Canadian  Mining  Journal,  vol.  xxxi,  p.  234. 

8  Iron  Age,  vol.  lxxxvi,  p.  1138.  ''  Ibid.,  vol.  xc,  p.  1339. 

8  Ibid.,  vol.  Lxxvi,  p.  1168.        *  Canadian  Engineer,  vol.  xx,  p.  332. 
1"  Mineral  Industry,  1911,  p.  398.         "  Iron  Age,  vol.  lxxx,  p.  1150. 
1^  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  318. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    231 

Before  shipment  to  the  United  States  was  finally  de- 
cided upon,  MacKenzie  and  Mann  made  Toronto  a  pro- 
posal to  build  a  steel  plant  at  that  city.  In  1907  they 
stated  that  they  would  like  to  smelt  1200  tons  ^  of  Moose 
Mountain  ore  at  Toronto  daily,  provided  that  350  acres 
of  Ashbridge's  Marsh,  which  was  regarded  as  a  suitable 
location  for  the  plant,  convenient  for  laying  down  coal  or 
coke,2  were  granted  them.^  They  proposed  to  build  blast 
furnaces  of  large  capacity,  steel  mills,  and  mills  for  the 
manufacture  of  billets,  rolled  plates,  bar  iron,  and  other 
products  for  export,^  Because  of  the  refusal  of  the  city  to 
grant  the  area  demanded,  and  other  adverse  factors,  such 
as  money  stringency  and  industrial  depression,^  the  pro- 
ject for  a  steel  plant  in  Toronto  was  abandoned,  and  the 
ore  was  shipped  to  the  United  States.^ 

§  10.  The  same  duty  that  had  hampered  the  shipment 
of  coal  from  Nova  Scotia  to  New  England  after  1897  ap- 
plied also  to  charcoal,  and  the  Rathburn  people  of  Des- 
eronto,  who  had  previously  been  shipping  charcoal  to  De- 
troit, found  that  they  could  no  longer  sell  profitably  in  the 
Detroit  market,  and  as  a  result  seventeen  large  kilns  were 
idle.''  Therefore,  in  1898  a  blast  furnace  was  built  at  Des- 
eronto  for  the  manufacture  of  charcoal  iron.*  It  was  put 
in  operation  in  1899,^  and  was  continually  in  blast  until 
1902.  Charcoal  was  supplied  from  the  Rathburn  kilns  and 
retorts  at  Deseronto.^"  Ores  from  Lake  Superior  districts 
and  from  Bessemer,  Ontario,  were  used.  Fluxing  materials 
from  the  Bay  of  Quinte  Railway  quarries  were  available 

*  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  199. 

*  Iron  Age,  vol.  Lxxvin,  p.  1014. 

*  Canadian  Mining  Journal,  vol.  xxvni,  p.  482. 

*  Iron  Age,  vol.  lxxx,  p.  1085.  ^  /^id.,  vol.  Lxxxi,  p.  323. 
^  Canadian  Engineer,  vol.  xvii,  p.  43. 

^  Iron  Age,  vol.  lx,  September  9,  p.  8. 
^  Canadian  Engineer,  vol.  vi,  p.  285. 

'  Canada,  Report  on  Mining  and  Metallurgical  Industries,  pp.  321-22. 
*°  Industrial  Canada,  vol.  ii,  p.  333. 


232    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

at  low  cost.^  The  iron  was  used  almost  entirely  for  the 
manufacture  of  malleable  castings  and  car  wheels  and  for 
general  foundry  work,  where  exceptional  strength  and 
density  are  required.  Some  of  it  has  been  sold  on  the 
Continent  and  in  Great  Britain. ^ 

In  1906  the  company  found  increasing  difficulty  in  get- 
ting wood  at  reasonable  prices.  The  blast  furnace  had  to 
be  closed  down  until  some  repairs  had  been  made  and  the 
plant  somewhat  enlarged  to  permit  the  use  of  coke  as  fuel.' 
Since  hardwood  limits  were  soon  secured  in  Hastings 
County  ^  and  since  the  furnace  was  modeled  on  charcoal 
furnace  principles,  charcoal  has  been  used  most  of  the 
time.  A  special  low  sulphur  coke  from  the  Connellsville 
district  has,  however,  been  used  on  occasion.^  In  1911,  a 
year  of  low  prices,  the  company  had  no  difficulty  in  market- 
ing its  small  production;  since  charcoal  iron  always  com- 
mands a  good  price  and  has  a  ready  sale.® 

§  11.  Ferro-products  and  pig  iron  and  steel  have  been 
produced  in  Canada  by  electrical  processes  in  more  recent 
years.  The  possibility  of  economically  producing  steel  and 
iron  by  this  method  has  been  a  matter  of  recent  discussion  and 
experiment,  and  the  process  is  still  in  the  experimental  stage. 

In  1907  the  Electro-Metals  Company  of  Welland,  On- 
tario, was  formed  ^  to  manufacture  pig  iron,  high-grade 
steel  and  steel  castings,  and  ferro-products  in  a  3000  horse- 
power furnace  using  power  furnished  by  the  Ontario  Power 
Company.^  The  electric  furnace  at  the  "Soo"  has  not 
been  regularly  in  operation  since  the  trial  tests  in  1907. 
In  that  year  the  Electric  Furnace  Products  Company  of 

*  Iron  Age,  vol.  lx,  September  9,  p.  285. 

*  Industrial  Canada,  vol.  ii,  p.  333. 

8  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  197. 

*  Iron  Age,  vol.  Lxxrx,  p.  1582. 

^  Ontario,  Report  of  the  Bureau  of  Mines,  1908,  p.  314. 

'  Personal  Correspondence. 

'  Iron  Age,  vol.  lxxix,  p.  1061.  ^  Ibid.,  p.  1665. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    233 

Pittsburg  secured  the  promise  of  a  ten-year  tax  exemption, 
and  a  fixed  assessment  of  $25,000  for  a  further  ten  years, 
from  Chippewa,  Ontario,  and  purchased  nineteen  acres  and 
promised  to  build  a  $50,000  plant  for  the  manufacture  of 
structural  steel.  ^  In  1909  the  Electric  Steel  Company  was 
formed  to  establish  a  steel  plant  at  Welland.^  In  1904  Mr. 
J.  E.  Evans,  of  Belleville,  had  begun  to  experiment  on  the 
use  of  the  titaniferous  iron  ores  of  Canada,  and  devised  an 
electric  furnace  to  produce  tool  steel  of  distinctly  superior 
character.  In  1909  Dr.  Stansfield,  of  McGill  University, 
formed  a  partnership  with  Mr.  Evans,  whose  process,  when 
improved,  was  called  the  Evans-Stansfield  Direct  Elec- 
tric Smelting  Process.  A  furnace  was  built  at  McGill  Uni- 
versity with  a  daily  capacity  of  one  half  ton  of  steel.  This 
pro\'ides  for  the  direct  manufacture  of  tool  steel  from  pre- 
viously useless  titaniferous  ores,  which  comprise  more  than 
half  of  the  known  Canadian  ores.*  In  1913  the  Moffat 
Irving  Steel  Works  of  Toronto  were  built  to  produce  steel 
castings  by  electric  process.^ 

Most  of  the  electric  companies  produce  chiefly  ferro- 
products,  such  as  ferro-silicon,  ferro-phosphorus,  and  ferro- 
titanium.  All  of  these  are  being  made  by  the  Electric  Re- 
duction Company  of  Buckingham,  Quebec.  Ferro-silicon 
and  ferro-titanium  have  been  made  at  Welland.  In  1912, 
7834  short  tons  of  ferro-products  constituted  the  output 
of  electric  furnace  plants.  In  the  calendar  year  1912  the 
imports  of  ferro-products  were  19,810  tons,  worth  $469,- 
884.^  The  Welland  plants  probably  produce  at  a  higher 
cost  than  American  plants.  Indeed,  in  the  face  of  the  duty 
of  $2.50  on  ferro-products,  American  firms  are  able  either 
to  undersell  Canadians  or  to  force  them  to  sell  at  most 
discouraging  prices.^ 

^  Iron  Age,  vol.  lxxxiv,  p.  991.        ^  Industrial  Canada,  vol.  x,  p.  16. 

^  Canadian  Mining  Journal,  vol.  xxxii,  pp.  591-92. 

*  Iron  Age,  vol.  xciii,  p.  132. 

^  Canada,  Production  of  Iron  and  Steel  in  Canada,  1912,  p.  22. 

^  United  States,  Tariff  Hearings,  1909,  p.  1480. 


234    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  12.  Something  has  been  said  from  time  to  time  about 
the  possibihty  of  producing  iron  in  British  Columbia.  The 
demand  for  manufactured  iron  in  British  Columbia  is 
rapidly  increasing,  and  high  prices,  due  to  the  heavy  freight 
charges  from  Eastern  points  and  Great  Britain,  have  fre- 
quently raised  the  question.  The  ore  supplies  on  the  coast 
are  sufficient  for  an  iron  industry,  and  a  good  quality  of 
pig  iron  could  be  produced.^  A  small  blast  furnace,  erected 
in  1880  at  Irondale,  in  the  State  of  Washington,  was  oper- 
ated till  1891.  When,  in  1901,  the  Pacific  Steel  Company 
was  organized  to  acquire  and  operate  this  furnace,  it  was 
modernized  by  an  expenditure  of  about  $100,000.  Ores 
from  Texada  Island  and  from  Hamilton,  Washington,  were 
used.  The  Texada  ores  had  to  be  roasted  to  get  rid  of  sul- 
phur, so  the  project  did  not  meet  with  success  and  was 
closed  down  ^  until  1911,  when  operations  were  revived.^ 

In  1909  the  Washington  Steel  Company  was  incorporated 
to  acquire  coal  properties  in  British  Columbia,  and  to 
build  blast  furnaces  and  rolling  mills  north  of  Seattle.^ 
After  inspecting  the  Vancouver  Island  deposits  in  1907, 
Mr.  J.  S.  Bradford,  an  English  iron  master,  tried  to  or- 
ganize the  Northern  Pacific  Iron  and  Steel  Company,  and 
proposed  the  building  of  open-hearth  steel  furnaces,  blast 
furnaces,  blooming  mills,  tin-plate  mills,  a  cast-iron  pipe 
foundry,  iron  tube  works,  a  bar  mill,  and  later  ship-plate 
and  rail  mills.^  In  1911  the  British  Columbia  Steel  Com- 
pany was  formed,  with  a  capital  of  $10,000,000,  to  build 
a  large  steel  plant  near  Vancouver.^  The  only  practical  re- 
sults of  these  suggestions  have  been  the  addition  of  a  steel 
foundry  converter  to  the  plant  of  the  Vancouver  Engineer- 
ing Works  in  1909,  the  only  Canadian  steel  furnace  west 
of  the  Great  Lakes.    The  foundry  produces  a  small  but 

*  Monetary  Times,  vol.  xliv,  p.  1414.  '  Lindeman,  op.  ciL,  p.  7. 

*  Monetary  Times,  vol.  XLVii,  p.  845.  ^  Ibid.,  p.  845. 
^  Iron  Age,  vol.  lxxx,  p.  656, 

^  Monetary  Times,  vol.  xlvi,  p.  1030. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    235 

steady  supply  of  heavy  steel  castings  which  cannot  be 
cheaply  transported  to  western  Canada.^ 

The  truth  of  the  matter  seems  to  be  that,  while  there  are 
ores  and  coal  and  fluxing  materials  in  British  Columbia, 
the  present  price  of  coke  on  the  coast  (from  $7  to  $8  per 
ton,  with  little  likelihood  of  its  being  less  while  the  present 
price  of  coal  continues)  does  not  seem  to  justify  the  ex- 
pectation that  an  iron-smelting  industry  will  develop  in 
the  near  future.  Electric  smelting  on  a  large  scale  is  not 
an  immediate  prospect,  since  the  process  has  not  been  per- 
fected sufficiently  to  be  economically  feasible.  A  British 
Columbia  industry  is,  then,  merely  a  possibility  of  the 
future.^ 

§  13.  Much  of  the  imported  iron  and  steel  products  have 
come,  of  recent  years,  from  the  United  States,  Hence  it 
has  been  natural  to  expect  that  a  Canadian  plant  should 
be  built  by  the  United  States  Steel  Corporation,  and  this 
suggestion  was  early  discussed.  In  1904  certain  advan- 
tages of  such  a  scheme  were  set  forth.  Canada  at  that  time 
offered  bounties  on  pig  iron  and  steel  billets  and  certain 
iron  and  steel  products,  whether  or  not  such  products  were 
consumed  in  Canada.  In  addition,  the  duties  on  bar  iron 
and  other  iron  and  steel  products,  especially  steel  rails, 
were  rather  onerous  to  outsiders,  but  ore  and  coking  coal 
entered  Canada  free  or  at  a  low  rate  of  duty.  Port  Col- 
borne,  on  the  north  shore  of  Lake  Erie,  at  a  point  near  the 
Welland  Canal,^  was  the  location  suggested.  By  1906  the 
United  States  Steel  Corporation  had  acquired  lands  near 
Sandwich,  opposite  Detroit,  and  the  construction  of  a 
$10,000,000  plant  was  expected;  *  but  in  preference  to 
building  the  company  opened  a  branch  office  in  Toronto 
in  1911  and  since  then  has  been  doing  a  large  business, 

^  Industrial  Canada,  vol.  x,  p.  775. 

*  British  Columbia,  Report  of  Minister  of  Mines,  1912,  p.  27. 

*  Monetary  Times,  vol.  xxvii,  p.  39.  *  Ibid.,  vol.  xxxix,  p.  923. 


236    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

especially  in  lines  on  which  the  duties  are  low.^  Such  arti- 
cles as  triangular  mesh  concrete  reinforcement,  structural 
steel,  shapes,  bars,  rods,  sheet  steel,  steel  pipe,  wire  rope, 
and  nails  have  found  a  favorable  market.  ^ 

At  the  annual  meeting  of  the  directors  of  the  United 
States  Steel  Corporation  at  New  York  on  December  31, 
1912,  the  company  decided  to  build  a  $20,000,000  plant 
at  Sandwich,  to  manufacture  practically  all  classes  of  steed, 
wire,  rails,  structural  and  bar  steel,  tin  plate,  tubing,  nails, 
pig  iron,  and  steel  billets.  Building  operations  have  since 
then  been  postponed,  pending  tariff  legislation  in  either 
Canada  or  the  United  States,  or  both. 

§  14.  It  seems  practically  impossible  satisfactorily  to 
cover  the  miscellaneous  undertakings  in  the  manufacture 
of  iron  and  steel  products  in  Canada.  Yet  a  large  number 
of  firms  carry  on  a  more  or  less  successful  business  in 
special  branches.  Between  1891  and  1910  the  number  of 
plants  producing  "iron  and  steel  products"  increased  from 
twenty-nine  in  1890  and  1900  to  eighty-nine  in  1910.  The 
products  increased  in  value  from  about  $4,000,000  in  1890, 
to  about  $7,000,000  in  1900,  and  to  over  $34,000,000  in 
1910.  Although  the  number  of  foundries  and  machine 
shops  did  not  expand,  their  products  increased  in  value 
from  $17,000,000  in  1890,  and  $15,000,000  in  1900,  to  over 
$45,000,000  m  1911.  Bridge-building  and  the  production 
of  wire  fencing  have  also  prospered.^  In  the  calendar  year 
1910  the  total  production  of  iron  and  steel  products 
amounted  to  $113,000,000  as  compared  with  $30,000,000 
m  1890  and  1900.4 

Some  attempts  have  come  to  unhappy  endings  and  other 
efforts  have  been  reorganized  and  redirected.  Some  of 
these  are  sufficiently  important  to  warrant  discussion.  In 
1901  the  Cramp  Ontario  Steel  Company  was  formed  to 

^  Monetary  Times,  vol.  xlvii,  p.  843.         ^  Ibid.,  vol.  xxx,  p.  139. 
»  See  Appendix  C.  Table  I.  «  Ibid.,  Table  II. 


THE  RECENT  fflSTORY,  OF  THE  INDUSTRY    237 

build  at  Collingwood  a  blast  furnace,  steel  furnaces,  and 
rolling  mills,  to  produce  pig  iron,  steel  ingots,  plates,  struc- 
tural steel,  rails,  and  rods.  Collingwood  was  chosen  as  the 
site  of  the  proposed  plant  because  it  had  shipping  advan- 
tages by  which  ore  and  coal  could  be  cheaply  assembled, 
and  the  product  cheaply  marketed,  especially  in  the  North- 
west, and  because  it  offered  a  bonus  of  $115,000  and  ex- 
emption of  part  of  the  property  from  taxation.^  Ore  was 
to  be  procured  from  the  Helen  Mine.^  Machine  shops,  a 
forge,  power  works,  a  merchant-bar  mill,  rolling  mills 
and  heating  furnaces,  a  guide  mill,  and  an  open-hearth 
plant  were  built  in  1902.^  The  blast  furnace  was  omitted 
from  the  list  temporarily,  so  that  large  stocks  of  pig  iron 
would  not  be  accumulated.'*  Rods,  a  special  product  of  the 
company,  were  to  be  sold  to  the  Imperial  Steel  and  Wire 
Company,  whose  plant  was  adjacent  to  that  of  the  steel 
company. 

Neither  the  rolling  mills  nor  the  open-hearth  furnace 
ever  saw  hot  steel,  because  the  company  got  into  financial 
difficulties  in  1903.^  In  1904  it  was  relieved  of  its  obliga- 
tion to  build  the  blast  furnace  until  the  steel  plant  should 
be  fully  established,  on  condition  that  the  town  could  re- 
duce its  bonus  from  $115,000  to  $60,000.^  In  the  same  year 
the  company,  which  had  been  sued  for  a  note  of  $52,600,^ 
was  reorganized  as  the  Northern  Iron  and  Steel  Company.* 
The  new  company  was  to  install  a  plant  to  make  rolled 
wire  rods,  bolts,  nuts,  angles,^  and  such  other  shapes  and 
materials  as  the  market  demanded.^"    Operations  were 

^  Iron  Age,  vol.  lxvii,  January  10,  p.  21 . 

2  Morang's  Register,  1901,  p.  91. 

^  Iron  Age,  vol.  lxx,  October  30,  p.  9. 

*  Ibid.,  vol.  Lxxii,  September  10,  p.  20. 

^  Ontario,  Report  of  Bureau  of  Mines,  1908,  p.  198. 

^  Monetary  Times,  vol.  xxxvii,  p.  1127. 

^  Commercial  and  Financial  Chronicle,  vol.  lxxvii,  p.  2342. 

^  Ibid.,  vol.  Lxxix,  p.  215. 

'  Monetary  Times,  vol.  xxxviii,  p.  835. 

^°  Industrial  Canada,  vol.  v,  p.  442. 


238    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

begun  in  1906,^  but  in  1908  the  Northern  Iron  and  Steel 
Company  also  found  itself  in  financial  difiiculty.'^ 

Meanwhile,  the  Imperial  Steel  and  Wire  Company  of 
CoUingwood,  whose  directors  were  the  same  as  the  direc- 
tors of  the  Cramp  Steel  Company,^  had  been  formed  in 
1904  to  manufacture  wire  rods,  wire  and  wire  nails,  wood 
screws  and  wire  fencing,  at  a  time  when  there  was  a  large 
importation  of  such  articles.*  In  1906  the  plant  was  en- 
larged from  a  capacity  of  from  fifteen  to  fifty  tons  per  day.^ 
Since  then  the  business  has  been  flourishing,  and  the  com- 
pany declared  a  twenty  per  cent  stock  dividend  in  1912.^ 
So  far  as  can  be  understood,  the  Northern  Iron  and  Steel 
Company's  business  has  been  carried  on  in  conjunction  with 
that  of  the  Imperial  Steel  and  Wire  Company. 

In  1905  the  Canada  Tin  Plate  and  Sheet  Steel  Company 
was  granted  the  right  to  develop  1100  horse-power  from 
the  Williamsburg  Canal.  It  was  also  asking  the  town  of 
Brockville  for  land  worth  $2250,  free  w^ater,  tax  exemption, 
and  the  right  to  run  a  railway  track  to  the  St.  Lawrence 
River.  The  company  agreed  to  erect  mills,  to  employ  400 
men,  and  to  buy  the  surplus  electric  power  of  the  town.^ 
Building  was  started  in  May,  1905.  It  is  said  that  the  com- 
pany had  expected  tariff  protection,  but  as  we  have  seen, 
the  users  of  tin  plate  and  sheet  steel  successfully  objected 
to  the  increase  of  the  duties  on  such  raw  materials.^  Welsh 
and  American  competition  was  severely  felt,  but  an  appeal 
made  for  the  application  of  the  Dumping  Act^  was  only 
temporarily  granted.^"  In  1909  the  company  got  into  finan- 
cial difficulties,  and  was  reorganized  as  the  Canadian  Sheet 

1  Monetary  Times,  vol.  xl,  p.  460. 

2  Commercial  and  Financial  Chronicle,  vol.  Lxxxvi,  p.  484. 
'  Ibid.,  vol.  Lxxix,  p.  1025. 

*  Monetary  Times,  vol.  xxxvii,  p.  375.    ^  Ibid.,  vol.  xxxix,  p.  186. 
^  Ibid.,  vol.  XLix,  p.  108.  ^  Ibid.,  vol.  xxxviii,  p.  1225. 

^  Hardware  and  Metal,  vol.  xvn,  February  5,  1910,  p.  44. 
^  Iron  Age,  vol.  lxxxv,  p.  280. 
"  Ibid.,  vol.  Lxxxiv,  p.  434. 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    239 

Steel  Corporation  to  manufacture  ^  black  and  galvanized 
sheets,  for  which  there  was  a  good  market  —  one  better 
than  for  tin  plate. ^ 

Of  like  character  has  been  the  rolling-mills  project  for 
Belleville,  Ontario.  In  1898  the  Abbot-Mitchell  Iron  Com- 
pany was  formed  to  make  pig  iron,  bar  iron,  puddled  bar, 
and  Bessemer  steel  at  Belleville.^  The  company  decided 
to  carry  on  the  work  of  rolling  mills  at  first,^  and  built  a 
plant,  including  a  spike  and  nail  factory  in  1899,  but  for 
some  reason  or  other  the  company  failed,  and  in  1901  the 
plant  was  sold  at  auction.^  In  1902  the  Belleville  Rolling 
Mills  Company  was  formed  to  operate  the  works,^  but 
they  were  soon  closed  down  again  and  part  of  the  product 
and  the  fuel  were  sold  for  taxes.'  In  1906  the  nail-making 
machines  were  removed  and  machinery  to  manufacture 
horseshoes  was  installed.*  The  plant  now  belongs  to  the 
Steel  Company  of  Canada. 

Elsewhere  more  success  attended  various  ventures. 
Most  rolling  mills  in  existence  in  1897  have  since  made  ex- 
tensions to  their  plants.^  Sydney  has  become  the  center  of 
a  considerable  iron  and  steel  industry,  attracted  largely  by 
the  presence  of  the  plant  of  the  Dominion  Steel  Corpora- 
tion.^"  Many  new  establishments  have  been  planned  and 

^  Monetary  Times,  vol.  xlii,  p.  2028.     ^  jron  Age,  vol.  lxxxv,  p.  289. 

*  Monetary  Times,  vol.  xxxii,  p.  1090. 

*  Iron  Age,  vol.  lxiii,  February  23,  p.  15. 

^  Monetary  Times,  vol.  xxxiv,  p.  1306.        ^  Ibid.,  p.  1596. 

^  Ibid.,  vol.  xxxvni,  p.  502.  ^  Ibid.,  vol.  xl,  p.  127. 

°  In  1899  the  Maritime  Nail  Company  extended  its  works  at  St.  John, 
doubhng  the  output,  and  in  1913  it  built  a  nail  factory  at  Fort  William. 
In  1904  the  plant  was  burned  down,  and  Sydney,  Nova  Scotia,  bid  for 
the  business.  Machinery  was  reinstalled  in  1900,  and  in  1907  the  Cape- 
well  Horse-Nail  Company  of  Hartford,  Connecticut,  took  over  a  control- 
ling interest.  In  1906  James  Pender  and  Company,  of  St.  John,  extended 
their  plant,  and  the  Peck  Rolling  Mills  Company,  of  Montreal,  followed 
the  same  policy. 

1°  In  1903  the  Dominion  Tar  and  Chemical  Company  established  a 
plant  at  Sydney  to  distill  various  chemical  products  from  the  Dominion 
Iron  and  Steel  Company's  coke  ovens.  The  Sydney  Cement  Company 
was  formed  to  use  the  slag  from  the  furnaces  for  the  manufacture  of  a 


240    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

built.  Of  these  the  most  important  may  be  mentioned. 
Pig  iron  has  been  produced  by  WiUiam  Frankel,  of  Tor- 
onto.^ The  furnace  of  the  Pictou  Charcoal  Iron  Company 
was  leased  to  the  Mineral  Products  Company  of  Hillsboro, 
New  Brunswick,  in  1897,^  but  has  not  been  worked  since 
1899.^  William  Kennedy  and  Sons,  of  Owen  Sound,  On- 
tario, have  produced  steel  billets  and  steel  castings.^  In 
1913  a  blast  furnace,  capable  of  producing  300  to  350  tons 
of  malleable  and  Bessemer  pig  iron  daily,  was  built  by  the 
Buffalo  Union  Furnace  Company  at  Port  Colborne,  On- 
tario. This  is  apparently  destined  to  become  one  of  the 
more  important  iron  plants  of  Canada.^ 

well-known  brand  of  cement.  In  1904  the  Cape  Breton  Iron  and  Steel 
Company  established  at  Sydney  an  iron  foundry,  costing  $250,000,  to 
produce  iron  and  steel  castings,  especially  for  marine  work.  In  1905  a 
large  stove  and  foundry  company  built  a  wire-nail  plant.  Other  firms 
have  negotiated  with  the  town  from  time  to  time. 

1  Canadian  Trade  Index,  1910. 

2  Canadian  Mining  Manual,  1896,  p.  146. 

3  Iron  Age,  vol.  lxx,  February  26,  p.  21. 

^  Canadian  Mining  Journal,  vol.  xxxi,  p.  208. 

^  Iron  Age,  vol.  xci,  p.  1205. 

In  1903  the  London  (Ontario)  Rolling  Mills  were  put  in  operation,  and 
the  Ottawa  Steel  Castings  Company  was  formed  to  manufacture  steel 
castings  under  special  patents.  In  1906  the  Royal  Screw  Company  was 
formed  to  manufacture  screws,  bolts,  nuts,  and  tools  at  Montreal;  the 
American  Horseshoe  Company  built  a  plant  near  the  Hamilton  Smelting 
Works;  the  Toronto  Pressed  Steel  Company  completed  a  plant  to  manu- 
facture railway  and  contractors'  supplies;  the  Continuous  Steel  Rail 
Company  began  to  manufacture  steel  rails,  car  wheels,  and  railway  sup- 
plies at  Toronto;  a  branch  factory  of  the  Union  Drawn  Steel  Company  of 
Pennsylvania  was  established  at  Hamilton  to  manufacture  polished  steel 
shafting,  finishings,  forgings,  and  castings;  the  IngersoU  Nut  Company 
built  a  plant  at  IngersoU;  the  Canadian  Shovel  and  Tool  Company  was 
incorporated  to  make  spades  and  mechanics'  tools  at  Hamilton;  at  Petei^ 
boro  a  shovel  and  tool  company  began  operations;  the  Manitoba  Rolling 
Mills  Company  was  formed  to  build  a  plant  at  Winnipeg;  a  malleable 
iron  foundry  was  built  at  Brock ville;  and  a  structural  steel  plant  was 
established  at  Walkerville,  Ontario.  In  1907  a  car-wheel  foundry  was 
established  at  Londonderry,  Nova  Scotia,  and  the  Structural  Steel  Com- 
pany of  Canada  was  empowered  to  carry  on  bridgi'-buildingand  other  iron 
and  steel  work.  In  1909  the  Provincial  Steel  Company  was  formed  with  a 
capital  of  $250,000,  and  began  to  r^roll  rails.  In  1910  the  Superior  Roll- 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    241 

§  15.  This  detailed  discussion  of  the  development  of 
the  various  establishments,  together  with  the  statistics  of 
growth  previously  presented,  make  very  evident  the  rapid 
advance  of  the  Canadian  iron  and  steel  industry  in  recent 
years.  A  few  features  of  this  progress  are,  however,  of 
particular  interest. 

In  the  first  place,  the  greatest  developments  have  oc- 
curred in  the  primary  industry  in  the  Provinces  of  Onta- 
rio and  Nova  Scotia.^  The  output  in  Quebec  has  dropped 
from  11,121  tons  in  1904  to  658  tons  in  1911,  and  to  noth- 
ing in  1912;  in  no  year  has  the  industry  of  Quebec  assumed 
any  great  importance.  The  Nova  Scotia  industry  was  in 
existence  prior  to  1897,  but  rapid  advances  were  made  in 
1901  and  in  1904  to  1905.  In  the  calendar  year  1912  Nova 
Scotia  produced  as  much  as  424,994  tons  of  pig  iron.  On- 
tario has  realized  the  most  phenomenal  growth  of  her  iron 

ing  Mills  Company  was  formed  to  build  a  foundry  and  a  wire  and  nail 
factory  at  Fort  William.  In  the  same  year  all  the  radiator  companies  of 
Canada  were  amalgamated  as  the  Steel  and  Radiation  Company  of 
Canada,  and  in  1912  this  company  built  a  new  boiler  and  radiator  plant 
at  St.  Catherines.  In  1910  there  were  mergers  of  several  malleable  cast- 
ings companies  and  of  several  machinery  companies.  The  International 
Tool  Steel  Company  was  formed  to  manufacture  high-grade  steel  for  the 
making  of  edge  tools.  In  1911  the  Canadian  Tube  and  Iron  Company 
built  a  plant  at  Cote  St.  Paul,  Quebec,  for  the  manufacture  of  rods,  tubes, 
bolts,  and  girders.  The  Canada  Steel  Company  built  a  mill  at  Hamilton 
to  roll  steel  bars  and  to  manufacture  parts  of  farm  implements  from  old 
scrap  rails.  In  1910  the  Eastern  Canada  Steel  and  Iron  Works  of  Quebec 
erected  a  large  plant  to  manufacture  structural  steel  for  buildings,  rail- 
ways, etc.,  at  Quebec,  and  it  doubled  the  plant  in  1911.  In  1912  and  1913 
three  English  firms  established  branches  in  Canada  to  manufacture 
boilers,  window  sashes,  and  tools,  respectively.  In  1913  the  Owen  Sound 
Rolling  Mills  were  incorporated  to  manufacture  wrought  iron  and  steel 
piping  and  tubing,  pipe  fittings,  bar  iron,  steel  rods,  structural  steel,  fish 
plates,  spikes,  and  steel  rails.  A  German  firm  established  a  company  to 
handle  its  products  and  possibly  to  build  a  mill  if  sales  should  justify 
such  a  scheme.  The  Imperial  Iron  and  Steel  Corporation  built  a  rolling 
mill  and  a  horseshoe  factory  at  Prince  Albert,  Saskatchewan.  The  Swed- 
ish Crucible  Steel  Company  and  the  Detroit  Steel  Products  Company 
built  factories  at  Windsor,  Ontario,  and  the  American  Titanic  Iron  Com- 
pany of  Quebec  was  formed  to  produce  iron  and  steel. 
*  See  Appendix  B,  Table  II. 


242    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

and  steel  industry.  In  1895  no  pig  iron  was  produced  in 
the  Province.  It  was  the  Hamilton  Furnace  that  made 
Ontario  an  iron-producing  Province  in  1896.  At  the  present 
time  Ontario,  whose  output  was  526,635  tons  in  1912,  pro- 
duces more  pig  iron  than  all  the  other  Canadian  Proviaces 
together. 

Another  striking  feature  is  that  the  industry  is  rather 
definitely  localized.  In  Nova  Scotia,  Sydney,  North  Syd- 
ney, and  Sydney  Mines  are  the  chief  centers  of  the  in- 
dustry, due  largely  to  the  existence  of  coal  supplies.  Mon- 
treal and  its  vicinity  contain  practically  all  the  important 
establishments  in  Quebec.  Although  Ontario's  industry  is 
more  widely  distributed,  the  chief  centers  are  Sault  Ste. 
Marie,  Midland,  and  Hamilton.  Deseronto  and  Port 
Arthur  are  less  favored  points,  and  the  establishments  in 
these  places  are  correspondingly  small.  Port  Colborne  has 
recently  become  a  new  iron  center. 

The  growing  importance  of  the  steel  branch  of  the  in- 
dustry is  simply  an  expression  of  a  general  world-wide 
tendency.  The  manufacture  of  steel  was  begun  in  Canada 
as  early  as  1883  by  the  Nova  Scotia  Steel  Company  and 
the  Montreal  Steel  Works,  but  there  were  practically  no 
additions  to  the  steel  furnace  capacity  until,  in  1900,  the 
Hamilton  Company  added  a  steel  branch  to  their  plant. 
The  Dominion  Iron  and  Steel  Company  and  the  Algoma 
Steel  Company,  which  have  grown  up  since  1900,  turn 
practically  all  their  large  output  of  pig  iron  into  steel  bil- 
lets. Wrought  iron  and  puddled  bars  have  practically 
passed  from  the  iron  and  steel  vocabulary.  Indeed,  the 
iron  produced  by  the  larger  companies  is  usually  turned 
into  steel  without  even  being  moulded  into  pigs. 

Although  the  manufacture  of  finished  products  is  al- 
ways the  most  important  phase  of  an  industry,  it  is  just 
this  feature  of  development  that  is  so  frequently  forgotten, 
while  the  primary  industry  receives  the  bulk  of  public  at- 
tention. As  we  have  seen,  an  increasing  number  of  plants 


THE  RECENT  HISTORY  OF  THE  INDUSTRY    243 

producing  highly  finished  articles  have  been  put  in  opera- 
tion, or  the  size  of  the  old  plants  has  been  expanded  in  re- 
cent years.  The  most  striking  feature  of  this  development 
is  that  a  large  part  of  it  has  occurred  in  the  last  decade. 
The  value  of  the  capital  invested  increased  over  200  per 
cent  between  1900  and  1910  as  compared  with  but  54.7 
per  cent  increase  in  the  previous  census  period,  and  the 
value  of  the  product  advanced  by  over  225  per  cent  as 
compared  with  22.2  per  cent  growth  for  the  earlier  decade.^ 

Part  of  this  rapid  advance  in  the  finishing  industry  is 
due  to  the  operations  of  the  large  iron  and  steel  companies 
themselves.  It  seems  to  be  a  general  principle  that  the  com- 
pany that  can  produce  highly  finished  products  is  certain 
of  a  fairly  stable  market.  Hence,  when  the  iron  and  steel 
industry  is  under  discussion,  one  must  remember  that  a 
modern  steel  corporation  is  no  small  concern;  in  fact,  it  is 
apt  to  produce  everything  from  iron  ore  and  pig  iron  to 
tacks.  In  this  respect,  then,  as  well  as  in  the  increased  out- 
put of  primary  products,  the  Canadian  iron  and  steel  in- 
dustry has  made  phenomenal  progress  in  recent  years. 

Finally,  most  of  the  Canadian  companies  have  declared 
themselves  efficient  and  prosperous.  \Miile  it  is  a  common 
and  politic  method  to  complain  of  depressions  and  diffi- 
culties, and  to  state  publicly  the  dangers  of  the  industry 
whenever  protection  is  being  discussed,  it  is  still  more  com- 
mon for  the  chief  iron  and  steel  financiers  to  laud  the  op- 
portunities that  lie  in  the  future.  The  annual  reports  of  the 
Steel  Company  of  Canada,  the  Canada  Iron  Corporation, 
and  especially  the  Dominion  Steel  Corporation,  the  Nova 
Scotia  Steel  and  Coal  Company,  and  the  Lake  Superior 
Corporation,  glow  with  such  terms  as  "moving  smoothly," 
"every  confidence,"  "cannot  fail  to  secure  prosperity," 
"decreased  cost  of  manufacture."  Obviously  the  recent 
ventures  have  been  successful  and  the  future  is  assured. 
1  See  Appendix  C,  Table  II. 


CHAPTER  X 

THE   COMBINATION   MOVEMENT 

§  1.  It  would  have  been  surprising,  in  these  days  of 
trusts,  industrial  combinations,  and  integration  of  indus- 
try, if  the  organization  of  a  Canadian  iron  and  steel  trust 
to  attack  the  United  States  Steel  Corporation,  or  the  amal- 
gamation of  the  Canadian  companies  with  the  United 
States  Steel  Corporation  to  form  an  "all- American"  trust, 
had  never  been  mentioned.  As  early  as  1899  a  suggestion 
was  made  that  Canadian  interests  in  the  iron  trade  should 
unite  in  an  organization  which  could  purchase  supplies 
through  a  central  agency  and  sell  products  in  the  same 
way  without  destroying  competition  or  opposing  public 
interest.^ 

Although  no  such  comprehensive  scheme  has  as  yet  been 
de%ased  or  realized,  there  has  been  evidence  from  time  to 
time  that  the  producers  of  certain  kinds  of  articles  have 
formed  associations  which  have  been  quite  effective  in  their 
control  over  the  prices  of  their  particular  products.  It 
woidd  require  the  "big  stick"  of  a  Roosevelt  or  the  imag- 
ination of  a  Pujo  Committee  to  ferret  out  the  truth  in 
respect  to  intricacies  of  relationship  between  the  Canadian 
iron  and  steel  companies.  Their  actual  amalgamation  has 
attracted  attention,  and  it  is  the  purpose  of  the  present 
chapter  to  estimate  so  far  as  may  be  possible  the  extent 
and  character  of  this  movement. 

§  2.  Between  the  years  1890  and  1900  there  was  a  phe- 
nomenal growth  in  the  wire-nail  business  and  other  hard- 
ware lines  in  Canada  ^  as  well  as  in  the  United  States.   But, 

1  Monetary  Times,  vol.  xxxn,  p.  1384. 
*  Canadian  Engineer,  vol.  ix,  p.  54-. 


THE  COMBINATION  MOVEIVIENT  245 

in  a  country  like  Canada,  with  a  comparatively  small  home 
consumption,  manufacturers  soon  reach  the  point  of  over- 
production, and  the  consequent  struggle,  besides  compe- 
tition from  without,  demand  a  certain  unity  to  prevent 
price-cutting  and  the  granting  of  excessive  credits  and 
discounts.^ 

As  we  have  seen,  the  tariff  on  most  hardware  articles  was 
increased  in  1887,  and  competition  soon  developed.  To 
meet  this,  associations  were  formed  from  time  to  time  and 
maintained  so  far  as  possible.  It  is  not  evident  just  when 
the  associations  were  first  organized,  but  they  appear  to 
have  secured  satisfactory  control  by  1893.^  Possibly  the 
associations  were  formed  in  1892;  possibly  they  existed 
before  and  were  reorganized  in  that  year.  At  all  events, 
manufacturers  of  iron  products  were  in  Toronto  in  Janu- 
ary, 1893,  forming  associations  of  makers  of  bar  iron,  cut 
nails,  horseshoes,  bolts  and  nuts,  rivets  and  burrs,  screws, 
plain  ynre,  barbed  wire,  and  ^vire  nails. ^  A  shovel  associa- 
tion is  supposed  to  have  existed  from  about  the  same  time* 
The  producers  of  these  different  articles  were  usually  the 
same  persons,  and  the  features  and  methods  of  the  various 
associations  were  practically  uniform.  The  main  features 
may  be  briefly  set  forth. 

In  the  first  place,  all  producers  of  certain  goods  were 
invited  to  join  an  association.  Frequently  individual  mem- 
bers found  it  advantageous  to  resign  from  the  association 
and  forfeit  their  deposits  in  order  to  gain  the  advantage 
of  increased  profits  on  a  more  extensive  output  and  sale. 
Later  they  would  be  invited  to  reenter  the  fold.  In  short, 
the  associations  were  made  as  comprehensive  as  possible, 
and  included  the  Montreal  Rolling  Mills,  the  Ontario 
Rolling  Mills  of  Hamilton,  the  Ontario  Tack  Company, 

1  Iron  Age,  vol.  lxvi,  November  29,  p.  55. 

^  Hardware  and  Metal,  December  30,  1905,  p.  21. 

^  Monetary  Times,  vol.  xxvi,  p.  788. 

■•  Iron  Age,  vol.  lix,  February  11,  p.  16. 


246    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Pillow-Hersey  Company  of  Montreal  (which  was  absorbed 
by  the  Montreal  Rolling  Mills  in  1903,  but  still  retained 
its  identity  so  far  as  the  association  agreements  were  con- 
cerned), the  Graham  Nail  Works,  the  Maritime  Nail  Com- 
pany of  St.  John,  W.  H.  Woodall,  Portland  Rolling  Mills 
of  St.  John,  the  Peck  Benny  Rolling  Mills  of  Montreal, 
J.  Pender  and  Company  of  St.  John,  and  the  Abbott- 
Mitchell  Company  of  Belleville,  Ontario.  Not  all  of  these 
belonged  to  the  associations  all  the  time  or  to  all  the  asso- 
ciations at  any  time,  but  whenever  they  began  to  act 
independently,  they  were  invited  to  conform  to  the  rules 
by  the  secretary,  "Jenkins  and  Hardy,"  ^  of  Toronto;  and 
if  they  refused,  other  steps  were  taken  against  them. 

The  point  of  departure  in  the  method  of  the  associations 
was  the  adoption  of  a  base  price  for  the  different  articles, 
from  which  price  variations  could  be  made,  subject  to  the 
rules  of  the  associations.  For  instance,  during  several 
years,  the  quoted  price  of  cut  nails  was  $2.10,  but  in  1895 
this  was  raised  to  $2.50  under  the  protection  of  higher 
prices  in  the  United  States.^  In  general,  the  prices  varied 
from  time  to  time  according  to  the  conditions  of  competi- 
tion with  independent  Canadian  firms,  or  with  American 
producers,  or  by  reason  of  price-cutting  by  the  members 
of  the  associations  themselves.  The  accompanying  table 
indicates  the  maximum  variations  and  the  maximum  and 
minimum  price  indices  from  1890  to  1902, 

The  prices  of  nearly  all  articles  were  low  from  1893  to 

1897,  but  several  cases  of  severe  cuts  occurred  in  1897  and 

1898.  Other  breaks  in  the  price  level  occurred  from  1902  to 
1903  and  1906  to  1909.  Since  1909  the  prices  of  horse- 
shoes, screws,  and  cut  nails  have  risen  considerably  under 
the  control  of  the  Steel  Company  of  Canada. 

Yet  these  price  lists,  as  quoted  in  trade  journals,  can 
scarcely  be  regarded  as  significant.  Actual  prices  can  only 
be  estimated  by  deducting  from  the  base  prices  the  dis- 
1  A  firm  of  accountants.  ^  Iron  Age,  vol.  lvi,  p.  645. 


THE  COMBINATION  MO\TE]VIENT 


247 


The  index  numbers  for  the  wholesale  prices  ^  of  certain  arti- 
cles supposedly  controlled  by  various  associations;  the 
years  for  the  maximum  and  minimum  prices,  1890  to  1912; 
special  years  of  decrease  in  price 


Article 


Bar  iron 

Horseshoes       

Screws  (wood) 

Cut  nails 

Wire  nails 

Galvanized  barbed  wire  fenc- 
ing   


Minimum 


Index 
number 


79.6 
91.2 
90.0 
81.2 
75.4 

66.1 


Year 


1898 
1898 
1908 
1897 
1898 

1912 


Maximum 


Index 
number 


129.5 
116.6 
137.9 
119.6 
127.2 

149.9 


Year 


1890 
1912 
1912 
1906 
1900 

1890 


Special  years  of  decrease 

Bar  iron 1894r-98,  1901,  1904 

Horseshoes 1897-99,  1901-02,  1909 

Screws  (wood) 1907 

Cut  nails 1891-92,  1897-98 

Wire  nails 1903,  1906,  1908 

Galvanized  barbed  wire  fencing 1895,  1897-98,  1909 

counts  given  to  the  jobbers  or  wholesalers.  Members  of 
the  associations  received  a  list  of  jobbers  who  were  en- 
titled to  special  or  "  loyalty"  discounts,  provided  they  pur- 
chased from  the  association  firms  alone.  Each  jobber  paid 
the  base  price;  but  after  making  a  statement  of  the  amount 
purchased,  and  a  declaration  that  no  goods  had  been  pur- 
chased elsewhere,  the  discounts  were  returned  by  the  secre- 
tary of  the  associations  and  thus  the  actual  price  to  jobbers 
was  less  than  the  so-called  base  price.  It  was  also  found 
necessary  from  time  to  time  to  give  special  discounts  to 
such  large  buyers  as  Massey-Harris  and  Company,  whose 
importance,  of  course,  enabled  them  to  enforce  their  claim 
to  special  consideration. 

These  prices  were  further  encroached  upon  from  time 

1  Canada,  Wholesale  Prices  in  Canada,  1890-12;  base  period  1890  to 
1899,  inclusive. 


248    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

to  time  by  price-cutting  of  firms  which  had  previously  be- 
longed to  the  associations.  As  tack  and  nail  machines  can 
be  quickly  installed,  an  opportunity  to  reap  an  extraor- 
dinary, if  temporary,  profit,  was  frequently  too  great  a 
temptation  to  be  withstood.  Such  an  occurrence  was  at 
first  guarded  against  by  attempts  to  limit  production  by 
restricting  the  number  of  machines  in  operation  and  pro- 
hibiting an  increase  in  their  number.  Deposits  of  from  $50 
to  $200  were  required,  varying  with  the  producer  and  the 
year.  These  deposits  were  forfeited  whenever,  upon  com- 
plaint of  one  member  of  an  association,  it  could  be  proved 
that  another  member  had  broken  the  agreement. 

Much  of  the  difiiculty  of  maintaining  prices  was  due  to 
competition  from  without.  When  the  nail  associations  of 
the  United  States  broke  up  in  1896,  the  Canadian  price  of 
cut  and  wire  nails  promptly  fell,  and  the  associations  were 
practically  dissolved.  As  the  Maritime  Provinces  nail  firms 
seemed  to  have  special  difficulty  in  meeting  the  competi- 
tion of  both  British  and  American  firms,  they  were  fre- 
quently tempted  to  cut  prices.  Whenever  such  practices 
were  deemed  necessary  to  keep  the  trade  from  outsiders, 
the  secretary  of  the  associations,  who  was  supposed  to  pass 
judgment  on  the  question  of  necessity,  gave  his  sanction. 
For  instance,  from  time  to  time  the  Ontario  Rolling  MUls 
were  given  permission  to  meet  the  competition  of  the 
McDonnell  RoUing  Mills  and  the  Atlas  Tack  Company,  as 
well  as  American  mills.  Such  a  practice  was  avoided  when- 
ever possible. 

As  the  system  of  forfeiting  deposits  was  not  always  satis- 
factory, a  pool  system  was  introduced  in  1898.  Each  mem- 
ber was  required  to  pay  15  to  25  per  cent  of  the  value  of 
excess  sales  to  the  associations.  If  a  man  had  not  secured 
his  share  of  the  trade,  he  would  receive  15  to  25  per  cent 
on  what  he  had  been  unable  to  sell.  The  aim  of  this  sys- 
tem was  the  limitation  of  output  and  sales  to  a  "desirable" 
quantity.  The  pool  was  divided  according  to  an  adjusted 


THE  COMBINATION  MOVEMENT  249 

proportion  determined  by  the  amount  manufactured  by 
each  firm. 

Although  it  is  difficult  to  determine  exactly  what  con- 
trol was  exercised  by  the  associations,  it  appears  that 
practically  all  the  important  firms  were  members  of  the 
associations  from  time  to  time,  and  that  various  measures, 
fines,  special  forms  of  competition,  and  pooling  agree- 
ments were  used  to  keep  such  members  in  line.  The  jobbers 
were  controlled  by  a  system  of  special  and  loyalty  dis- 
counts which  they  could  scarcely  afford  to  sacrifice.  Sub- 
ject to  English,  American,  and  domestic  competition,  and 
the  possibility  of  infraction  of  the  agreements,  prices  were 
maintained  as  high  as  possible.  The  reduction  of  the  tariff 
on  such  articles  as  nails,  bar  iron,  galvanized  barbed  wire, 
and  horseshoes,  in  1896  and  1897,  evidently  reduced  prices 
and  temporarily  disorganized  the  associations.  In  1905 
these  hardware  associations  were  prosecuted  in  the  Toronto 
Police  Court.  The  magistrate  held  that  prices  had  been 
kept  up,  and  committed  the  members  of  the  associations 
for  trial,  but  no  report  of  the  trial  in  a  higher  court  can  be 
found,  and  there  is  little  evidence  of  the  existence  of  asso- 
ciations since  that  time. 

§  3.  As  a  matter  of  fact,  there  has  been  little  need  for  this 
old  form  of  combination  in  the  hardware  lines  since  1909, 
in  view  of  the  formation  of  the  Steel  Company  of  Canada, 
which  now  controls  the  larger  part  of  the  output  of  hard- 
ware articles  in  Canada.  This  Steel  Company  of  Canada 
was  a  combination  of  the  Hamilton  Iron  and  Steel  Com- 
pany and  practically  all  the  important  hardware  produc- 
ing firms  in  Canada.^ 

The  Hamilton  Iron  and  Steel  Company  was  itself  a  con- 
solidation of  a  number  of  firms.  In  1899  the  Hamilton 
Blast  Furnace  Company  and  the  Ontario  Rolling  ISIills 
Company,  a  previous  consolidation  of  two  rolling  mills  in 
^  Industrial  Canada,  vol.  xi,  p.  331. 


250    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Hamilton,  were  amalgamated  as  the  Hamilton  Steel  and 
Iron  Company  with  a  capitalization  of  $2,000,000.  This 
arrangement  united  a  smelting  works,  rolling  mills,  and 
forge  works;  all  successful  institutions.  Some  of  the  rolHng 
mills  had  previously  used  wrought  scrap  and  puddled  bars 
as  raw  materials,  and  it  was  thought  that  the  amalgama- 
tion would  probably  result  in  the  complete  disuse  of  scrap 
iron.^  In  the  same  year  the  8  per  cent  dividend  on  $150,000 
of  preferred  stock  of  the  Equitable  Mining  and  Develop- 
ing Company,  which  was  formed  to  mine  ores  in  eastern 
Ontario  under  contract  with  the  Hamilton  Company,  was 
guaranteed  by  the  company .^  In  1907  the  Hamilton  Steel 
and  Iron  Company  was  reorganized  as  the  Hamilton  Iron 
and  Steel  Company,  with  a  capital  of  $3,000,000. 

In  the  mean  time  a  number  of  other  consolidations  of 
iron  and  steel  interests  had  developed.  In  1903  the  Mon- 
treal Rolling  Mills  acquired  the  entire  properties  of  the 
Pillow-Hersey  Company  of  Montreal  for  $600,000,^  and 
in  1906  it  acquired  the  property  of  the  Hodgson  Iron  and 
Tube  Company,^  and  other  expansions  followed.  In  1910 
this  company  was  operating  three  manufacturing  plants 
in  Montreal.^ 

In  1903  the  Toronto  Bolt  and  Forging  Company  bought 
the  McDonnell  Rolling  Mills  of  Toronto  for  $90,000.^  In 
1910  a  more  extensive  merger  took  place,  when  Mr.  Wat- 
son, of  the  Toronto  Bolt  and  Forging  Company,^  arranged 
an  amalgamation  of  the  Toronto  Bolt  and  Forging  Com- 
pany, the  Gananoque  Bolt  Company,  the  Belleville  Iron 
and  Horseshoe  Company,  and  the  Brantford  Screw  Com- 
pany, as  the  Canada  Bolt  and  Nut  Company,  with  a  cap- 
italization of  $1,000,000  bonds,  $1,250,000  of  7  per  cent 

1  Iron  Age,  vol.  lxiii,  April  20,  p.  29. 

2  Monetary  Times,  vol.  xxxiii,  p.  433. 

'  Iron  Age,  vol.  lxxi.  May  28,  p.  20.        *  Ihid.,  vol.  lxx\%  p.  268. 
s  Baillie,  Wood,  and  Croft,  Circular,  June  13,  1910,  p.  3. 
®  Canadian  Engineer,  vol.  x,  p.  l-tl. 
^  Monetary  Times,  vol.  xliv,  p.  715. 


THE  COMBINATION  MOVEMENT  251 

preferred  stock,  and  $1,250,000  of  common  stock.  The 
shareholders  of  the  constituent  companies  received  7  per 
cent  cumulative  preferred  shares  of  the  new  company,  plus 
a  25  per  cent  common-stock  bonus.  ^  In  the  case  of  the 
Brantford  Screw  Company,  the  holders  of  Brantford  Screw 
Company  preferred  stock  received  $145  of  the  new  pre- 
ferred stock  for  every  share  of  the  old  stock  and,  in  addition, 
a  bonus  of  30  per  cent  in  common  stock  of  the  new  com- 
pany;  and  the  holders  of  common  stock  received  $120  of  the 
new  preferred  and  a  30  per  cent  bonus  in  common  stock, 
for  every  share  of  common  stock  in  the  old  company. ^ 
Meanwhile,  the  Canada  Screw  Company  of  Hamilton  had 
absorbed  the  Ontario  Tack  Company,^  and  it  is  interest- 
ing to  note  that  in  1907  the  stock  of  the  Dominion  Wire 
Manufacturing  Company  was  purchased  by  W.  H.  Farrell 
and  associates,  of  the  United  States  Steel  Corporation.'* 

Such  preliminaries  prepared  the  way  for  further  develop- 
ments in  1910,  when  the  Steel  Company  of  Canada  was 
incorporated  to  acquire  the  business  and  undertakings  or 
the  outstanding  bonds  and  stocks  of  the  Hamilton  Iron 
and  Steel  Company,  the  Montreal  Rolling  Mills  Company, 
the  Canada  Screw  Company,  and  the  Canada  Bolt  and 
Nut  Company.^ 

It  was  difficult  for  a  time  to  secure  a  basis  of  amalgama- 
tion. As  early  as  April,  1910,  Mr.  W.  M.  Aitken  had  pur- 
chased the  Montreal  Rolling  Mills  Company  for  $4,200,000 
subject  to  the  $500,000  bond  issue.  But  further  negotia- 
tions ceased  for  a  time,  since  a  basis  of  amalgamation 
could  not  be  agreed  upon.^  Ultimately  the  new  company 
authorized  the  issue  of  $15,000,000  of  common  stock, 
$10,000,000  of  7  per  cent  cumulative  preferred  stock,  and 
$10,000,000  of  6  per  cent  bonds.  Of  these,  $11,500,000  of 

^  Hardware  and  Metal,  January  8,  1910. 

^  Monetary  Times,  vol.  xlviii,  p.  38.        *  Ihid.,  vol.  XLiv,  p.  1812. 

*  Hardware  and  Metal,  July  16,  1910,  p.  35. 

^  Monetary  Times,  vol.  xliv,  p.  2412.  ^  Hji^,^  p.  1812. 


252    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

common  stock,  $6,500,000  of  preferred  stock,  and  $6,850,- 
000  of  bonds  were  issued.  The  capitalization  was  supposed 
to  be  based  on  the  ascertained  earnings  of  the  Hamilton 
Iron  and  Steel  Company,  the  Canada  Screw  Company,  and 
the  Montreal  Rolling  Mills  for  the  preceding  years,  and 
the  estimated  earnings  of  the  newly  formed  Canada  Bolt 
and  Nut  Company  and  of  the  Dominion  Wire  Manufactur- 
ing Company.^  The  different  concerns  agreed  that  bonds 
should  be  issued  to  the  extent  of  two  thirds  of  the  appraised 
value  of  the  properties,  preferred  stock  to  the  extent  of  one 
third  of  the  appraised  value  of  the  properties,  together  with 
the  liquid  assets,  and  that  common  stock  should  be  issued 
against  the  earning  capacity  as  indicated  by  the  history  of 
the  companies,  provided  that  no  dividends  should  be  paid 
on  common  stock  until  there  was  a  sujSBcient  surplus  in  the 
treasury  to  pay  dividends  on  preferred  stock  for  one  year 
in  advance.^  Incidentally,  the  shareholders  of  the  Hamil- 
ton Iron  and  Steel  Company  held  out  for  $9,300,000  of  the 
stock  for  their  $3,000,000,  and  the  Montreal  Rolling  Mills 
shareholders  got  $300  per  share  for  stock  quoted  at  $250.' 
The  holders  of  Dominion  Wire  Manufacturing  Company 
stock,  persons  connected  with  the  United  States  Steel 
Corporation,  received  $250  per  share. ^  Since  the  forma- 
tion of  the  company,  a  further  issue  of  $650,000  of  bonds 
has  been  made  for  improvements  and  additions  in  the  form 
of  rod  and  steel  mills,  making  the  total  outstanding  issue 
$7,000,000.5 

The  advantages  of  the  consolidation  have  frequently 
been  stated.  In  the  first  place,  it  was  claimed  that  reduc- 
tions would  be  made  in  the  cost  of  administration.  The 
Toronto  office  of  the  Canada  Screw  Company  was  re- 
modeled, and  the  offices  and  office  staffs  of  the  Montreal 

'  Hardware  and  Metal,  July  16,  1910,  p.  35. 

*  Monetary  Times,  vol.  xlviii,  p.  38. 

*  Hardware  and  Metal,  April  16,  1910,  p.  34. 

*  Globe,  July  19,  1910,  p.  12.       6  Annual  Report,  1911. 


THE  COMBINATION  MOVEMENT  253 

Rolling  Mills  and  Dominion  Wire  Manufacturing  Com- 
pany were  removed  to  the  Toronto  office/  and  the  staff  of 
the  Steel  Company  reorganized. ^  The  promoters  hoped 
that  transportation  costs  would  be  lowered  by  letting  each 
mill  look  after  its  own  territory,  and  one  traveler  do  the 
work  formerly  done  by  several.'  Economies  in  the  pur- 
chase of  supplies  and  materials,  increased  efficiency  due  to 
specialization  of  the  individual  plants,  and  the  avoidance 
of  unnecessary  duplication  of  work  were  other  obvious 
possibilities.*  Incidentally,  it  appeared  that  the  Hamilton 
Steel  plant  might  supply  the  raw  materials,  pig  iron,  and 
wire  rods  for  the  finishing  mills,  which  had  been  partly 
supplied  by  the  Dominion  Iron  and  Steel  Company.^ 

There  are  other  features  of  the  consolidation  which  are 
more  interesting  and  significant.  Many  of  the  finished  arti- 
cles produced  by  the  plants  in  question  are  among  the 
most  highly  protected  iron  and  steel  products;  the  rates 
varying  from  75  cents  plus  10  per  cent  under  the  British 
preferential  tariff  to  75  cents  plus  25  per  cent  under  the 
general  tariff  on  iron  and  steel  nuts,  rivets,  washers,  bolts, 
etc.,  or  20  per  cent  and  35  per  cent  on  nails,  tacks,  etc., 
and  22|  per  cent  and  35  per  cent  on  screws.^  The  inclusion 
of  the  Dominion  Wire  Manufacturing  Company  was  re- 
garded as  placing  the  company  in  a  commanding  position 
in  the  bolt,  nut,  nail,  and  screw  markets.  While  competi- 
tion was  not  entirely  eliminated,  it  was  expected  that  prices 
would  be  held  more  stable  in  the  future.''  The  company 
still  has  the  London  Rolling  Mills  and  the  Graham  Nail 
Company,  and  more  recently  the  Dominion  Steel  Corpora- 
tion as  chief  competitors,  but  the  location  of  its  own  plants 

1  Hardware  and  Metal,  August  6,  1910,  p.  42. 

2  Ibid.,  August  20,  1910,  p.  37. 

^  Monetary  Times,  vol.  xlv,  p.  40. 

*  Baillie,  Wood,  and  Croft,  Circular,  1910. 

*  Monetary  Times,  vol.  xlv,  p.  48. 

6  Customs  Tariff,  1907,  Items,  412-17. 
'  Hardware  and  Metal,  June  4,  1910,  p.  39. 


254    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

at  Lake  Ontario  and  St.  Lawrence  River  ports,  together 
with  proximity  to  the  market,  gives  the  company  a  par- 
ticularly strong  position  in  supplying  the  hardware  trade.  ^ 

§  4.  Many  Canadian  companies  are  the  outgrowth  of  a 
long  period  of  development,  but  few  exemplify  this  fact 
more  than  the  Nova  Scotia  Steel  and  Coal  Company.  As 
we  have  seen,  the  Nova  Scotia  Forge  Company  was  formed 
in  1872  with  a  capital  of  $4,000,  to  manufacture  various 
kinds  of  forgings  from  wrought  and  scrap  iron,  and  a  pro- 
fitable industry  was  carried  on  at  New  Glasgow  and  Tren- 
ton until  1882.  At  that  time  mild  steel  began  to  attract 
attention  in  the  manufacture  of  axles  and  other  forgings; 
so,  to  keep  abreast  of  the  times,  the  Nova  Scotia  Steel 
Company,  with  a  capital  of  $160,000,  was  formed  to  manu- 
facture steel  by  the  Siemens-Martin  open-hearth  process  ^ 
from  scrap  iron  and  imported  pig  iron.  The  original  forge 
company  became  a  large  buyer  of  steel  ingots  and  billets 
from  the  new  concern,  which,  in  turn,  was  dependent  for 
its  repair  work  on  the  forge  company.  Hence,  in  1889,  to 
insure  economy  of  operation,  the  two  companies,  which 
were  really  controlled  by  identical  interests,  were  amal- 
gamated as  the  Nova  Scotia  Steel  and  Forge  Company, 
and  extensions  and  additions  were  made  to  the  plant.'  For 
a  time  the  new  company  was  the  only  producer  of  steel  in 
Canada,  and  enjoyed  the  benefit  of  the  protective  tariff.* 

In  1888  the  proprietors  decided  to  build  a  plant  to  man- 
ufacture pig  iron  for  use  in  the  steel  plant,  but  as  the  risk 
of  the  new  proposal  was  great,  a  new  company,  the  New 
Glasgow  Coal,  Iron,  and  Railway  Company,  was  formed 
with  a  capital  of  $1,000,000.^ 

The  interdependence  of  the  steel  works  and  the  blast 

^  Hardware  and  Metal,  June  4,  1910,  p.  39. 

^  Industrial  Canada,  vol.  xi,  p.  328. 

'  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  544. 

*  Journal  of  the  Iron  and  Steel  Institute,  1895,  no.  1,  p.  528. 

*  Industrial  Canada,  vol.  xi,  p.  328. 


THE  COMBINATION  MOVEMENT  255 

furnace  was  a  large  factor  in  the  success  of  each.  The  steel 
mills  demanded  an  increasing  amount  of  iron,  much  to  the 
advantage  of  the  blast  furnace  company,  which  weathered 
the  depression  of  1895  to  1896  with  success.^  The  obvious 
community  of  interest  suggested  the  advisability  of  another 
consolidation  as  soon  as  the  practicability  and  success  of 
the  new  project  was  proved.  Consequently,  in  1895,  the 
Nova  Scotia  Steel  Company  was  formed  to  purchase  ^ 
both  plants.  The  steel  works  were  extended,  and  thus  the 
furnace  could  be  operated  more  regularly.^  As  the  pig  iron 
was  entirely  under  its  own  control,  the  company  reduced 
the  cost  of  steel,  and  thereby  secured  orders  that  other- 
wise might  have  gone  elsewhere.^ 

In  1900  the  Nova  Scotia  Steel  Company  purchased  as  a 
going  concern  the  property  and  business  of  the  General 
Mining  Association,  including  leases  of  coal  areas  and  mines 
with  good  shipping  facilities,^  for  $1,500,000.^  In  1901  the 
Nova  Scotia  Steel  and  Coal  Company  was  formed  to  take 
over  the  properties  of  the  Nova  Scotia  Steel  Company  with 
its  acquired  properties  of  the  General  Mining  Association. 
Common  stock  amounting  to  $5,000,000  and  $2,000,000 
of  8  per  cent  cumulative  preferred  stocks  were  provided  for. 
Of  these,  $3,090,000  of  common  stock,  with  a  bonus  of 
$1,030,000  of  preferred  shares,  were  issued  to  acquire  the 
properties  of  the  Nova  Scotia  Steel  Company  and  a  bond 
issue  of  $1,500,000,  that  had  been  put  out  for  the  purchase 
of  the  General  INIining  Association  properties.'  The  di- 
rectors of  the  Nova  Scotia  Steel  Company  became  the 
directors  of  the  new  company,^  which  immediately  entered 
upon  an  era  of  development  at  Sydney  Mines  and  New 
Glasgow. 

^  Canadian  Mining  Review,  vol.  xi,  p.  35. 

^  Ibid.,  vol.  XIII,  p.  97.  '  Iron  Age,  vol.  LVi,  p.  1212. 

*  Canadian  Mining  Review,  vol.  xv,  p.  256. 

^  Ibid.,  vol.  XX,  p.  166.  ®  Monetary  Times,  vol.  xxxiv,  p.  108. 

^  Canadian  Mining  Revieu\  vol.  xx,  p.  166. 

8  Commercial  and  Financial  Chronicle,  vol.  lxxiii,  p.  76. 


256    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

By  1901  the  Nova  Scotia  Steel  and  Coal  Company  had 
gradually  acquired  a  business,  thoroughly  satisfactory  in 
character,  although  capable  of  being  more  fully  extended. 
The  company  owned  coal  mines  and  iron  ore  beds  of  a  very 
extensive  and  desirable  character;  it  produced  its  own  pig 
iron  to  feed  its  own  steel  furnaces,  which,  in  turn,  supplied 
a  finishing  plant  that  was  at  that  time  second  to  none  in 
the  country.  The  amalgamations  that  have  been  described 
were  simply  the  result  of  a  natural  development.  As  new 
phases  of  the  industry  were  developed,  it  seemed  advisable 
to  test  them  imder  the  guise  of  a  new  company,  but  once 
that  phase  was  a  proved  success,  the  natural  course  was 
to  amalgamate  it  with  the  older  concern  into  a  well- 
rounded  industrial  and  financial  organization. 

This  policy  of  financing  conservatively  the  newer  pro- 
jects has  been  followed  down  to  the  present  time.  In  1912 
the  Eastern  Car  Company  was  formed  by  the  same  inter- 
ests to  carry  on  the  business  of  car-building.  The  direc- 
torate of  the  company  is  practically  the  same  as  that  of 
the  Nova  Scotia  Steel  and  Coal  Company,  and  the  entire 
issue  of  common  stock  has  been  taken  up  by  "Scotia," 
while  the  principal  and  interest  of  a  $1,000,000  bond  issue 
is  guaranteed  by  the  same  company.^  In  short,  any  con- 
solidation of  companies  now  represented  by  the  Nova 
Scotia  Steel  and  Coal  Company  is  simply  a  natural  phase 
of  the  expansion  of  business  into  new  lines  and  an  illus- 
tration of  integration  of  industry,  rather  than  a  combina- 
tion of  competing  firms. 

§  5.  The  Dominion  Steel  Corporation  with  a  capitaliza- 
tion of  about  $70,000,000,  including  the  funded  debt  and 
the  preferred  and  common  stocks  of  the  constituent  com- 
panies not  yet  purchased  by  the  corporation,  is  said  to  be 
the  largest  industrial  consolidation  of  recent  years  in  Can- 
ada.  Frequently,  this  corporation  is  discussed  as  a  second 

1  Monetary  Times,  vol.  XLVlli,  p.  2223. 


THE  COMBINATION  MOVEMENT  257 

"Steel  Trust,"  controlling  prices  indiscriminately.  The 
truth  is  that  the  original  Dominion  Steel  Corporation  was 
simply  an  amalgamation  of  two  interdependent  companies 
doing  entirely  different  kinds  of  business. 

The  Dominion  Iron  and  Steel  Company  was  formed  in 
1899  by  the  interest  back  of  the  Dominion  Coal  Company. 
As  the  new  industry  was  to  provide  a  profitable  market  for 
coal,  the  first  link  between  the  two  companies  was  joined 
and  ever  since  they  have  been  closely  connected. 

On  June  29,  1899,  a  contract,  signed  by  the  two  com- 
panies, provided  for  a  supply  of  coal  at  $1.20  per  ton.  The 
Dominion  Iron  and  Steel  Company  was  given  the  right, 
up  to  January  1,  1903,  to  lease  the  Dominion  Coal  Com- 
pany properties,  paying  all  the  latter's  fixed  charges  and 
6  per  cent  on  the  common  stock,  provided  that  if  at  any 
time  the  output  of  coal  should  exceed  3,500,000  tons  an- 
nually, the  lessee  should  pay  the  lessor  an  additional  15 
cents  per  ton,  and  that  $600,000  should  be  deposited  before 
the  lease  should  go  into  effect,  to  be  forfeited  in  case  the 
lessee  should  fail  to  make  the  payments  called  for  in  the 
lease. ^  That  bituminous  coal,  run-of-mine,  was  selling  at 
this  time  in  Montreal  at  $2.72  rather  reflects  on  the  merits 
of  the  contract  from  the  coal  company's  point  of  view,^ 
considering  that  freight  charges  to  Montreal  were  about  $1.' 

In  1901  Mr.  Whitney,  "on  account  of  poor  health," 
sold  a  controlling  interest  in  the  companies  to  James  Ross 
and  Canadian  associates  of  his  in  Montreal,  and  Mr.  Ross 
was  elected  president  of  the  companies.'* 

In  April,  1902,  the  opportunity  to  lease  the  properties 
of  the  Dominion  Coal  Company  was  taken  up.  Contrary 
to  the  expectation  that  the  earnings  of  the  company  would 
pay  its  own  dividends,  plus  interest  on  the  bonds  and  the 

^  Commercial  and  Financial  Chronicle,  vol.  lxix,  p.  79. 

2  Wholesale  Prices  in  Canada,  1891-1911,  p.  192. 

^  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  597. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxiii,  p.  1267. 


.258    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

dividends  on  the  preferred  stock  of  the  Dominion  Iron  and 
Steel  Company,  and  that  substantial  returns  would  fall  to 
the  common  stock  of  the  steel  company/  the  steel  com- 
pany was  soon  carrying  a  large  floating  debt,^  and  could 
not  get  enough  capital  to  complete  its  finishing  mills  and 
at  the  same  time  carry  on  the  coal  business.  On  the  other 
hand,  the  coal  company,  which  was  very  strong  financially, 
could  develop  the  coal  property  without  being  hampered 
by  want  of  capital.^  Besides,  it  claimed  that  the  Domin- 
ion Iron  and  Steel  Company  had  an  undue  opportunity  to 
deplete  and  plunder  the  coal  mines.  At  this  time  Mr.  Ross 
resigned  the  presidency  of  the  Dominion  Iron  and  Steel 
Company,  and  Mr.  J.  H.  Plummer,  who  had  already  been 
elected  to  the  board,  was  chosen  to  take  his  place.  The 
lease  was  revoked,  and  a  new  coal  contract  providing  for 
the  delivery  of  a  quantity  of  freshly  mined  run-of-mine 
coal,  necessary  for  four  blast  furnaces  and  accessories,  was 
agreed  upon,  on  condition  that  the  coal  company  was  given 
the  option  of  supplying  slack  coal  after  four  years,  if  not 
to  the  disadvantage  of  the  steel  company.*  In  1905  the 
Dominion  Iron  and  Steel  Company  gave  notice  for  a  large 
amount  of  coal  for  new  furnaces  which  would  be  put  in 
operation  during  1906.  The  coal  company,  which  found 
it  difficult  to  meet  these  demands  without  curtailing  the 
supply  to  other  customers,  who  were  purchasing  coal  at 
more  remunerative  prices,  proceeded  to  open  another  pit 
on  what  they  believed  to  be  the  Phelan  seam,  which  had 
been  chosen  by  the  steel  company  to  supply  the  proper 
kind  of  coal.  But  the  coal  from  the  new  mine  was  found, 
on  analysis,  to  be  useless,  was  rejected  by  the  steel  com- 
pany, and  many  consignments  were  taken  back  by  the  coal 
company. 

^  Commercial  and  Financial  Chronicle,  vol.  Lxxiv,  p.  832. 
^  Canadian  Annual  Review,  1903,  p.  507. 
^  Commercial  and  Financial  Chronicle,  vol.  lxxvii,  p.  300. 
*  Statist,  vol.  Liii,  p.  434. 


THE  COMBINATION  MOVEMENT  259 

After  some  discussion  it  was  agreed  that  the  steel  com- 
pany should  accept  for  special  purposes  75  tons  per  day 
from  the  new  mine,  if  it  was  specially  carded,  so  that  it 
would  not  get  mixed  with  coal  for  use  in  the  coke  ovens. 
This  arrangement  was  continued  for  some  months,  and 
henceforth  the  chief  difficulty  was  with  the  quantity  de- 
livered. As  the  coal  company,  in  1905  and  1906,  never 
quite  supplied  the  needs  of  the  steel  company,  except  in 
winter  months,  the  steel  company  had  to  purchase  coal 
elsewhere  at  higher  figures  in  order  to  operate  the  plant 
efficiently.  Under  temporary  agreement  the  steel  com- 
pany, to  assist  the  coal  company,  agreed  to  accept  a 
portion  of  the  deliveries  in  slack  and  banked  coal;  but  as 
deliveries  became  still  more  unsatisfactory,  the  manager 
of  the  steel  company  gave  notice  in  October,  1906,  that 
only  freshly  mixed  run-of-mine  coal  from  the  Phelan  seam 
would  be  accepted.  After  November  1,  1906,  the  coal 
was  sent,  marked  simply  "  Run-of-Mine,  Phelan  Seam," 
though  analysis  showed  that  much  of  it  was  from  the  new 
pit  and  so  high  in  sulphur  as  to  be  useless  in  the  manu- 
facture of  iron  and  steel.  When  protests  were  made  and 
notice  was  given  that  all  coal  containing  sulphur  in  ex- 
cess of  4  per  cent  would  be  rejected,  the  coal  company 
gave  notice  that  the  steel  company's  action  was  inter- 
preted as  a  clear  repudiation  of  the  contract,  which  it 
should  consider  as  terminated.  When  the  coal  company 
ceased  supplying  coal,  the  steel  works  were  temporarily 
closed  until  coal  could  be  secured  elsewhere  at  an  increased 
cost,^  which  was  charged  to  the  Dominion  Coal  Company. 
A  suit  for  damages  was  promptly  launched  by  the  steel 
company  against  the  coal  company.  In  1907  Judge  Long- 
ley,  of  Sydney,  decided  in  favor  of  the  steel  company,  but 
the  case  was  subsequently  carried  to  the  higher  court  and 
finally  to  the  Privy  Council. ^  All  oflEers  of  settlement  made 

^  Nova  Scotia  Law  Reports,  1909,  pp.  80-91. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxxv,  p.  866. 


260    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

by  the  coal  company  were  rejected/  and  finally,  in  1910, 
the  Privy  Council  declared  in  favor  of  the  steel  company, 
but  the  coal  company,  owing  to  the  increasing  costs  of  pro- 
ducing coal  and  the  increasing  price,  was  given  the  power  to 
declare  the  contract  at  an  end.^  In  1910  the  claims  of  the 
steel  company  were  paid  up,  and  a  price  of  $1 .55  for  coal 
was  decided  upon,  a  price  which  represented  an  advance 
to  the  coal  company  of  $216,000  on  an  output  of  800,000 
tons  per  year.^  Back  dividends  on  the  preferred  stock  of 
the  Dominion  Iron  and  Steel  Company,  which  had  not  been 
paid  since  1903,  were  fully  paid  up,  and  financial  condi- 
tions became  favorable  for  further  development. 

During  the  period  of  conflict,  the  amalgamation  of  the 
two  companies  was,  on  several  occasions,  suggested  as  a 
solution  of  the  whole  difficulty.  In  March  of  1907  there 
was  a  pronounced  effort  to  take  the  control  of  the  coal 
company  out  of  the  hands  of  Mr.  Ross  and  his  associates. 
Many  shareholders  of  the  coal  company  were  dissatisfied 
with  the  management  and  were  giving  their  proxies  to  cer- 
tain steel  interests.^  In  1907  a  bill  was  introduced  in  the 
Nova  Scotia  Legislature  to  permit  the  Dominion  Iron  and 
Steel  Company  to  guarantee  the  payment  of  principal  and 
interest  of  bonds  or  other  securities  of  companies,  the  ma- 
jority of  whose  stock  was  held  or  controlled  by  that  com- 
pany. It  was  said  that  the  company  had  acquired  coal 
areas  in  Cape  Breton  and  wanted  to  form  a  subsidiary 
company  to  operate  the  same.^  Later  in  the  year  ^  2000 
shares  of  the  New  Brunswick  Iron  Company  were  pur- 
chased at  $25  per  share. 

In  June  of  1907  Mr.  Ross  was  in  possession  of  a  large 
quantity  of  Dominion  Iron  and  Steel  Company  stock, 
which  he  had  been  buying  quietly  that  year,  to  such  an  ex- 

1  Commercial  and  Financial  Chronicle,  vol.  Lxxxvi,  p.  1591. 

2  Ibid.,  vol.  Lxxxvrii,  p.  508. 

'  Monetary  Times,  vol.  xliv,  p.  1612.  ^  Ibid.,  vol.  XL,  p.  1411. 

^  Commercial  and  Financial  Chronicle,  vol.  Lxxxrv,  p.  696. 
'  Canadian  Mining  Journal,  vol.  xxviii,  p.  631. 


THE  COMBINATION  MOVEMENT  261 

tent  that  he  had  become  the  largest  stockholder.^  He  con- 
trolled enough,  it  was  thought,  to  give  the  coal  people  ^ 
control,  and  efforts  were  made  to  obtain  control  of  the 
meeting  of  the  steel  company  to  be  held  in  June,  1907.' 
But  the  meeting  was  postponed  indefinitely  to  avert  danger, 
and  the  coal  company's  scheme  failed.* 

From  the  point  of  view  of  the  coal  company  an  amal- 
gamation scheme  seemed  desirable,  since  unity  might  make 
it  possible  for  the  steel  company  to  accept  slack  coal,  which 
it  had  refused  to  accept  largely  because  it  wished  to  main- 
tain a  favorable  contract  with  the  coal  company.  Instead 
of  simplifying  matters,  the  provision  for  an  arbitration  of 
the  price  at  the  end  of  every  five  years  complicated  the 
situation  by  adding  a  continued  element  of  uncertainty.^ 
The  Dominion  Iron  and  Steel  Company  was  interested  in 
an  adequate  supply  of  coal  of  proper  quality.^  As  early  as 
1908  it  was  suggested  that  amalgamation  would  be  of  value 
in  the  employers'  opposition  to  the  intrusion  of  interna- 
tional unionism  in  Nova  Scotia.^ 

In  November,  1909,  Mr.  Ross  confirmed  a  report  that  he 
had  sold  to  a  syndicate,  representing  the  Dominion  Iron 
and  Steel  Company,  $5,000,000  of  common  stock  at  $95 
per  share,  on  condition  that  all  shareholders  be  offered  the 
same  terms  and  be  given  an  opportunity  to  deposit  their 
shares  within  thirty  days,  duly  assigned  and  endorsed.  It 
was  provided  that  if,  at  the  end  of  the  thirty  days,  the  syn- 
dicate should  fail  to  make  satisfactory  arrangements,  Mr. 
Ross  should  have  the  right  to  terminate  negotiations.  The 
shares  were  to  be  paid  for  by  $25  in  cash  in  thirty  days,  and 
ten  installments  of  $7  per  share,  payable  at  intervals  of 

^  Commercial  and  Financial  Chronicle,  vol.  Lxxxv,  p.  102. 

^  Statist,  vol.  Lxni,  p.  688. 

'  Commercial  and  Financial  Chronicle,  vol.  LXXXV,  p.  866. 

*  Monetary  Times,  vol.  xli,  p.  13. 

^  Nova  Scotia  Law  Reports,  1909,  p.  l-tS. 

®  Monetary  Times,  vol.  xliii,  p.  2113. 

"  Canadian  Annual  Review,  1908,  p.  296. 


262    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

three  months  for  two  and  one  half  years  with  interest  at 
4^  per  cent,  payable  quarterly.  Holders  of  over  45,000 
shares  had  agreed  to  retain  their  shares  and  to  participate 
in  the  proposed  combination  to  the  extent  of  their  hold- 
ings.^ In  fact,  not  more  than  4000  shares  were  so  deposited, 
and  the  holders  were  paid  off  at  once.'^ 

At  the  annual  meeting  of  the  Dominion  Coal  Company, 
on  April  12,  1910,  the  possibility  of  consolidation  and  the 
relations  to  the  Dominion  Iron  and  Steel  Company  were 
informally  discussed.^  It  was  urged  that  the  board  should 
be  representative,  not  only  of  the  steel  company  and  its 
friends  as  shareholders,  but  of  other  shareholders  as  well, 
and  a  promise  was  made  that  Mr.  Butler,  the  new  general 
manager  of  both  companies,  would  carry  on  the  manage- 
ment and  relations  between  the  two  companies  in  a  strictly 
impartial  manner.  The  basis  of  a  proposed  merger  was 
considered  at  some  length.  Mr.  Plummer  said  that  the  fact 
that  holders  of  40,000  to  50,000  shares  would  have  to  be 
willing  to  accept  the  steel  company's  terms  ought  to  be  an 
ample  safeguard  against  any  unfair  treatment.  Unfortu- 
nately, the  earnings  of  both  companies  were  threatened, 
those  of  the  coal  company  by  a  miners'  strike,  and  those 
of  the  steel  company  by  the  loss  of  the  bounties.  Further- 
more, it  seemed  difficult  to  estimate  the  value  of  either  the 
coal  beds  or  the  iron  ore  deposits.  Mr.  Plummer  felt  as- 
sured that  the  merger  would  be  a  splendid  consolidation  of 
one  of  the  finest  coal  fields  in  America,  the  finest  ore  de- 
posit on  tidewater  on  the  continent,  and  an  excellent  steel 
plant  admirably  situated;  and  he  declared  that  neither  of 
the  companies,  with  all  their  properties,  would  be  nearly 
so  strong  separately  as  they  would  be  combined.  There- 
fore, he  recommended  amalgamation. 

On  April  20,  1910,  a  statement,  submitted  to  the  share- 
holders of  the  Dominion  Coal  Company  and  the  Dominion 

*  Commercial  and  Financial  Chronicle,  vol.  Lxxxnc,  p.  1350. 

2  Ibid.,  vol.  xc,  p.  702.  '  Annual  RepoH,  1909,  pp.  14-19. 


THE  COMBINATION  MOVEMENT  263 

Iron  and  Steel  Company  on  behalf  of  their  respective  boards 
of  directors,  proposed  a  union  of  the  interests  of  the  share- 
holders of  the  coal  and  steel  companies  by  an  exchange  of 
one  share  in  the  common  stock  of  the  Dominion  Steel  Cor- 
poration and  $4  in  cash  for  each  share  of  common  stock  of 
the  Dominion  Coal  Company  and  Dominion  Iron  and  Steel 
Company,  with  the  cash  consideration  payable  in  quar- 
terly installments  of  $1  per  share.  This  payment  of  cash  was 
equivalent  to  a  dividend  of  4  per  cent  per  annum  for  one 
year,  and,  while  forming  part  of  the  purchase  price,  was 
intended  to  obviate  any  call  on  either  company  for  divi- 
dends until  the  coal  strike  and  its  effect  had  passed  away 
and  the  new  plant  of  the  steel  company  was  completed. 
The  surplus  earnings  were  to  be  used  for  strengthening  the 
financial  position  of  the  two  companies  and  for  making 
permanent  improvements. 

Such  were  the  conditions  under  which  the  consoli- 
dation was  initiated.  The  probabiUty  that  no  dividends 
would  be  paid  on  the  stocks  of  the  constituent  companies 
decided  the  question,  and  by  November  1,  1910,  98,8  per 
cent  of  the  entire  common  stock  of  the  iron  and  steel  com- 
pany and  97.6  per  cent  of  the  entire  common  stock  of  the 
coal  company  had  been  exchanged.  On  that  date  $1,500,- 
000  of  5  per  cent  Dominion  Steel  Corporation  three-year 
debentures  were  issued  to  provide  for  the  payment  of  $4 
per  share  on  the  shares  acquired.  The  steel  corporation 
promised  not  to  issue  any  bonds  secured  by  mortgage  while 
these  debentures  were  outstanding.^  Provision  was  made 
also  for  a  possible  issue  of  preferred  stock  of  the  steel  cor- 
poration to  redeem  the  preferred  stocks  of  the  constituent 
companies  by  exchange  share  for  share.^ 

In  this  way  the  two  interdependent  companies,  whose 
history  had  been  marred  by  a  series  of  difficult  relations, 
entered  on  a  period  of  peaceful  union  under  one  manage- 

1  Dominion  Securities  Corporation,  Circular,  November  1,  1910. 

2  Prospectus. 


264    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

ment.  The  real  purpose  of  consolidation  was  the  assurance 
of  a  satisfactory  supply  of  coal  to  the  steel  plant  at  a  price 
satisfactory  to  the  coal  company.  To  the  extent  that  stock- 
holders of  the  constituent  companies  accepted  shares  of  the 
holding  company,  the  two  interests  became  identical,  and 
although  the  two  constituent  companies  still  exist,  that 
separate  existence  is  nominal,  except  for  the  interest  of 
a  very  few  independent  holders  of  common  shares  of  the 
Dominion  Iron  and  Steel  Company  and  the  Dominion  Coal 
Company,  as  well  as  the  holders  of  bonded  indebtedness 
and  preferred  stock  of  the  same  companies. 

The  principle  of  securing  control  of  coal  areas  was  car- 
ried further  by  the  leasing  of  the  properties  of  the  Cumber- 
land Railway  and  Coal  Company  in  1910.  It  is  said  that  the 
option  was  taken  by  the  Dominion  Iron  and  Steel  Com- 
pany while  the  coal  contract  dispute  was  on,  with  the  ob- 
ject of  securing  their  own  coal  supply  should  the  contract 
be  broken.^  The  Cumberland  Railway  and  Coal  Company 
had  been  incorporated  in  1883  as  a  consolidation  of  the 
Springhill  and  Parrsboro  Coal  and  Railway  Company  and 
the  Springhill  Mining  Company.  It  owned  about  thirteen 
square  miles  or  150,000,000  tons  of  good,  clean  coal,  besides 
a  railway  of  forty-two  miles  and  sidings  of  sixteen  miles, 
exclusive  shipping  piers  at  Parrsboro,  and  a  fleet  of  tugs 
and  ocean  barges  for  coal-carry ing.^  It  was  capitalized  at 
$1,000,000  of  common  stock  and  $1,500,000  of  first-mort- 
gage 6  per  cent  bonds. ^  In  December,  1910,  Mr.  Plummer 
announced  that  a  controlling  interest  in  the  company  had 
been  transferred  to  the  leading  directors  of  the  Dominion 
Steel  Corporation.'*  This  seemed  necessary  because  of  a 
clause  in  the  circular  of  April  20,  1910,  providing  that 
further  issues  of  stock  would  not  be  made  without  the 
sanction  of  the  stockholders.   But  at  the  annual  meeting 

^  Canadian  Mining  Journal,  vol.  xxxi,  p.  218. 

2  Commercial  and  Financial  Chronicle,  vol.  xci,  p.  1629. 

'  Monetary  Times,  vol.  XLV,  p.  2418.  *  Ibid.,  p.  2340. 


THE  COMBINATION   MOVEMENT  265 

of  the  Dominion  Steel  Corporation  on  May  19, 1911,  6000 
shares  of  the  Dominion  Steel  Corporation  were  issued  in 
exchange  for  20,000  shares  of  the  Cumberland  Railway  and 
Coal  Company.^  In  addition,  $979,000  of  the  company's 
6  per  cent  bonds  were  redeemed  by  an  issue  of  $1,174,000 
of  5  per  cent  bonds  ^  guaranteed  by  the  steel  corporation.' 

The  holding  company  form  of  consolidation  was  again 
called  into  operation  in  1910,  when  the  Dominion  Coal 
Company  decided  to  incorporate  the  Sydney  and  Louis- 
burg  Railway  Company,  to  which  the  valuable  railway 
property  directly  operated  by  the  coal  company  might  be 
transferred.  This  was  done  in  the  belief  that  the  railway 
could  be  more  satisfactorily  carried  on  by  an  independent 
company  controlled  by  the  coal  company  through  the 
ownership  of  all  the  capital  stock  of  the  railway  company.* 

In  1911,  2500  shares  of  Dominion  Steel  Corporation 
common  stock  were  issued  to  acquire  the  stock  of  the  Syd- 
ney Lumber  Company,  which  owned  a  good  property,  con- 
sisting of  sawmills,  timber  limits,  and  a  large  stock  of  lum- 
ber at  Dalhousie,  New  Brunswick.  The  same  method  was 
followed  in  securing  control  of  the  Black  Diamond  Une  of 
steamships,  owned  by  the  company.^ 

Another  feature  of  the  Dominion  Steel  Corporation 
illustrates  modern  integration  of  industry.  The  constitu- 
ent company  known  as  the  Dominion  Iron  and  Steel  Com- 
pany owns  not  only  iron  ores,  blast  furnaces  and  steel  fur- 
naces, but  also  coke  ovens,  and  finishing  mills  built  by  the 
company  itself  from  time  to  time  as  the  market  seemed  to 
warrant  extensions  of  the  business.  Had  these  branches  of 
the  business  been  acquired  through  amalgamation  with 
other  companies  or  the  purchase  of  stocks  of  other  com- 
panies, the  public  would  undoubtedly  have  considered  such 

1  Annual  Report,  1911,  p.  15.  *  Ibid.,  p.  7. 

'  Commercial  and  Financial  Chronicle,  vol.  xci,  p.  1772. 
*  Annual  Report,  1909,  pp.  6  and  20. 
6  Ibid..  1912,  pp.  10-11. 


266    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

operations  as  an  example  of  the  tightening  of  the  grip  of 
a  great  industrial  octopus,  a  Canadian  "Steel  Trust."  As 
a  natural  development  of  the  business,  the  operation  is 
practically  uncriticized,  and  justly  so,  for  it  has  simply 
aided  in  the  reduction  of  costs  of  the  various  marketable 
products. 

It  is  rather  early  to  judge  the  merits  of  the  consolida- 
tion, but  a  few  statements  may  be  made.  In  the  first  place, 
friction  between  the  two  most  important  companies  has 
been  entirely  and  permanently  eliminated,  much  to  the 
advantage  of  both.  A  constant  supply  of  coal  for  the  iron 
and  steel  plant  and  for  other  purposes  is  now  assured,  and 
by  the  acquisition  of  the  Cumberland  properties,  which 
have  since  been  discovered  to  be  more  valuable  than  was 
anticipated,^  the  open  market  may  be  easily  cared  for. 
Whether  or  not  the  consolidation  of  the  coal  companies  so 
concentrated  the  power  of  the  mine-owners  as  to  bring  to 
an  end  the  succession  of  strikes,  which  had  almost  become 
a  part  of  the  coal-mining  situation,  is  difficult  to  say,  but 
in  1911  the  strike  was  ended,  much  to  the  satisfaction  of 
the  companies.  In  short,  one  may  regard  the  Dominion 
Steel  Corporation  as  the  result  of  a  wise  and  conservative 
organization  of  various  allied  interests  into  a  well-inte- 
grated system. 

§  6.  At  times  some  financial  and  industrial  menagerie 
finds  its  way  into  the  hands  of  one  person.  We  have  al- 
ready seen  how  Mr.  Clergue  gradually  developed  industry 
after  industry  at  Sault  Ste.  Marie,  Ontario.  When,  in 
1902,  the  Consolidated  Lake  Superior  Company  collapsed, 
it  had  a  capitalization  of  $35,000,000  preferred  stock  and 
$82,000,000  common  stock, ^  and  owned  practically  all  the 
stocks  of  the  Ontario  Lake  Superior  Company,  the  Algoma 
Steel  Company,  the  Michigan  Lake  Superior  Company, 

^  Annual  Report,  1912,  p.  18. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxi,  p.  938. 


THE  COMBINATION  MOVEMENT  267 

the  Tagona  Water  and  Light  Company,  the  "Soo"  Pulp 
and  Paper  Company,  the  International  Transit  Company, 
the  St.  Mary's  Traction  Company,  the  British-American 
Express  Company,  and  the  Manitoulin  and  North  Shore 
Railway.^  After  the  reorganization  of  these  companies 
into  the  Lake  Superior  Corporation,  the  Algoma  Iron 
Works  and  the  Lake  Superior  Iron  and  Steel  Company 
were  added  to  the  list  of  subsidiaries. ^  In  1910  the  Can- 
nelton  Collieries  of  West  Virginia  were  purchased  and 
operated  by  the  Cannelton  Coal  and  Coke  Company, 
whose  shares  were  all  bought  up  by  the  Lake  Superior 
Company,  and  the  stock  of  the  Fiborn  Limestone  Company 
of  Michigan  was  purchased  outright.  In  1912  an  impor- 
tant financial  readjustment  took  place.  The  Algoma  Steel 
Corporation,  formerly  the  Lake  Superior  Iron  and  Steel 
Company,  whose  stock  was  owned  by  the  Lake  Superior 
corporation,  took  over  the  plant,  properties,  and  business 
of  the  Algoma  Steel  Company,  the  Lake  Superior  Power 
Company,  the  Algcma  Commercial  Company,  and  the 
Cannelton  Coal  and  Coke  Company.^  New  bonds  of  the 
Algoma  Steel  Corporation,  whose  business  and  properties 
constitute  the  best  and  largest  assets  of  the  Lake  Superior 
Company,  are  guaranteed  by  the  parent  company.^ 

As  a  "trust"  the  Lake  Superior  Corporation  is  obviously 
of  little  importance.  It  is  merely  a  holding  company  that 
unites  the  companies  which  have  from  time  to  time  been 
formed  to  develop  separate  branches  of  the  corporation's 
business  and  interests.  Its  subsidiaries  are  not  former  com- 
petitors in  any  respect,  not  even  in  their  demand  for  the 
superabundant  power.  In  short,  the  Lake  Superior  Cor- 
poration is  simply  an  example  of  extraordinary  and  exag- 
gerated integration  of  industry,  which  has  grown  up  more 
by  accident  than  because  of  any  industrial  merits. 

^  Canadian  Annual  Review,  1903,  p.  515. 

^  The  Annual  Financial  Review,  Canadian,  April,  1911,  p.  196. 

*  Ibid.,  November,  1912,  p.  99.      *  Iron  Age,  vol.  lxxxix,  p.  1171. 


268    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

§  7.  The  combination  movement  is  not  altogether  a 
recent  feature  of  Canadian  industry.  Indeed,  combinations 
of  varying  character  have  existed  for  a  considerable  time. 
Mr.  George  McDougall,  who  had  leased  the  car-wheel 
foundry  at  Three  Rivers  in  1875,  found  it  necessary  in  1883 
to  supply  his  charcoal  iron  by  the  purchase  and  operation 
of  the  Radnor  Forges.  As  this  supply  of  iron  was  insuffi- 
cient, two  more  furnaces  were  built  at  Drummondville, 
Quebec.  Car  wheels  were  manufactured  at  Three  Rivers 
and  Montreal,^  Quebec,  and  at  St.  Thomas,  Ontario.  In 
1899  the  Canada  Iron  Furnace  Company  was  formed  to 
acquire  the  Radnor  Forges  and  a  car-wheel  foundry  at 
Three  Rivers,  and  the  industry  was  carried  on  with  suc- 
cess.^ In  1900  this  Canada  Iron  Furnace  Company  built 
another  plant  at  Midland,  Ontario.  In  the  mean  time,  the 
Canada  Iron  and  Foundry  Company  controlled  car-wheel 
and  pipe  foundries  at  Three  Rivers,  Montreal,  St.  Thomas, 
Hamilton,  and  Fort  William,  and,  through  acquisition,  the 
foundry  at  Londonderry;  and  John  McDougall  and  Com- 
pany owned  the  furnaces  at  Drummondville,  Quebec.^  In 
1902  the  same  interests,  comprising  the  Drummonds,  Mc- 
Dougalls,  and  the  McCalls  of  Montreal,  purchased  the 
plant  of  the  Londonderry  Iron  Company  after  Drummond, 
McCall,  and  Company  had  for  some  years  used  part  of 
the  plant  in  the  manufacture  of  water  pipe.*  The  London- 
derry Iron  and  Mining  Company  was  formed  with  a  capi- 
tal of  $1,000,000  to  acquire  the  said  properties.^  In  1904 
the  Torbrook  ore  deposits  were  purchased,®  and  in  1905 
the  Annapolis  Iron  Mining  Company,  with  a  capital  of 
$1,000,000,  was  formed  to  carry  on  this  phase  of  the  work.' 

^  Bartlett,  op.  cit.,  p.  519. 

2  Canadian  Mining  Review,  vol.  xii,  p.  45. 

^  Monetary  Times,  vol.  xli,  p.  2125. 

*  Iron  Age,  vol.  lxx,  October  2,  1906,  p.  16. 

^  Canada,  Report  on  Mining  and  Metallurgical  Industries,  p.  540. 

^  Canadian  Mining  Review,  vol,  xxil,  p.  204. 

^  Ihid.,  vol.  xxviii,  p.  72. 


THE  COMBINATION  MOVEMENT  269 

In  1908  the  Drummond  Mining  Company  was  formed  to 
acquire  the  newly  discovered  ore  deposit  at  Bathurst,  New 
Brunswick.  "^ 

Thus,  a  group  of  industries  had  been  evolved,  dominated 
by  the  same  interests.  Drummond,  McCall,  and  Company, 
a  firm  of  iron  and  steel  merchants  in  Montreal,  practically 
controlled  the  marketing  of  all  of  the  products.^ 

In  1908  occurred  the  first  important  merger  in  the  in- 
dustry that  had  received  so  much  in  bounties,  when  these 
allied  firms  were  amalgamated  as  the  Canada  Iron  Cor- 
poration, with  a  capitalization  of  $3,000,000  of  6  per  cent 
preferred  stock,  $5,000,000  of  common  stock,  and  $2,920,- 
000  of  first-mortgage  bonds  and  $2,500,000  of  consolidated 
bonds. ^  Bessemer  iron  mines  in  Ontario  were  also  ac- 
quired.^ Bonds  were  issued  to  redeem  bonds  of  the  con- 
solidated companies,  and  preferred  and  common  stocks 
were  issued  as  fully  paid  to  the  vendors  in  consideration  for 
mines,  blast  furnaces,  and  foundries  hitherto  owned  and 
operated  by  the  merger  companies.^  Thus,  in  1909  the 
Canada  Iron  Corporation  owned  four  iron-ore  mines,  five 
blast  furnaces  and  foundries  in  seven  towns  and  cities,  in 
three  Provinces  of  Canada,  and  produced  iron  ore,  pig  iron, 
car  wheels,  cast-iron  pipe,  and  special  castings  of  all  kinds.® 

§  8.  In  1910  a  syndicate,  composed  of  Mr.  K.  W. 
Blackwell,  president  of  the  Investment  Trust  Company 
and  of  the  Montreal  Steel  Works,  with  W.  F.  Angus, 
vice-president  and  general  manager  of  the  Montreal  Steel 
Works,  offered  to  purchase  the  Montreal  Steel  Works 
on  a  basis  of  137§  plus  a  7  per  cent  dividend  on  common 
stocks  of  that  company,  and  the  directors  agreed  to  sell, 

^  Canadian  Mining  Review,  vol.  xxn,  p.  540. 
2  Industrial  Canada,  vol.  v,  p.  713. 

'  Annual  Financial  Review,  Canadian,  November  Supplement,  1912, 
p.  76. 

*  Canadian  Mining  Journal,  vol.  xxix,  p.  636.  ^  Prospectus. 

^  Canadian  Annual  Review,  1909,  p.  671. 


270    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

subject  to  the  consent  of  55  per  cent  of  the  stockholders.* 
The  assent  of  more  than  this  proportion  had  been  secured 
previous  to  the  public  offer.  It  is  said  that  Mr.  A.  J. 
Nesbit,  of  the  Investment  Trust  Company,  had  been  ac- 
quiring Montreal  Steel  stock  quietly  for  more  than  a 
year. 2  Shortly  after  this,  the  company  was  merged  with 
the  Ontario  Iron  and  Steel  Company  as  the  Canadian  Steel 
Foundries  with  a  capitalization  of  $8,050,000,  $3,000,000 
common,  $1,400,000  preferred,  and  $3,650,000  of  6  per 
cent  first-mortgage  and  collateral  trust  bonds.  The  capi- 
tal of  the  constituent  companies  had  been  $1,300,000  for 
the  Montreal  Steel  Works,  and  $500,000  for  the  Ontario 
Iron  and  Steel  Company.^  The  increase  in  the  capitali- 
zation was  supposed  to  be  based  on  future  earnings  after 
a  new  plant  should  be  built  at  Longue  Point  with  the  pro- 
ceeds of  a  bond  issue.* 

During  the  same  period  the  Canadian  Car  and  Foundry 
Company  had  been  formed  to  unite  the  Canada  Car  Com- 
pany, the  Dominion  Car  and  Foundry  Company,  and  the 
Rhodes  Curry  Car  and  Foundry  Company.  While  this  is 
not  primarily  an  iron  and  steel  company,  the  promoters 
urged  that  the  acquisition  of  the  Montreal  Steel  Works 
would  be  valuable  because  the  steel  plant  would  supply  the 
car  company,  which  had  been  for  some  time  one  of  the 
largest  customers  of  the  Montreal  Steel  Works;  ^  and  also 
because  the  latter  had  installed  a  special  plant  to  produce 
the  steel  required  by  the  car  companies.^  Incidentally,  it 
may  be  noted  that  the  Rhodes  Curry  Company  had  an 
iron  foundry  at  Amherst,  Nova  Scotia,  which  could  supply 
the  Maritime  market.  To  acquire  control  of  the  Canadian 
Steel  Foundries,  the  Canada  Car  and  Foundry  Company 
issued  $100,000  additional  preferred  stock  and  $375,000  of 

^  Monetary  Times,  vol.  xlvi,  p.  217. 

2  Industrial  Canada,  vol.  v,  p.  629. 

'  Ibid.,  vol.  XLV,  p.  2726.  *  Ibid.,  vol.  L,  p.  80. 

^  McCuaig's  Circular,  April  5,  1911. 

fi  Monetary  Times,  vol.  xlv,  p.  2726. 


THE  COMBINATION  MOVEMENT  271 

common  stock,  purchased  most  of  the  stock,  and  guaran- 
teed the  interest  on  the  bonds  of  the  newly  formed  found- 
ries company.  The  whole  arrangement  seems  to  have  been 
of  mutual  advantage,  since  a  large  part  of  the  product  of 
the  foundries  could  be  used  by  the  car  company,  while  the 
earning  power  of  the  subsidiary  company  was  supposed  to 
be  increased  by  the  manufacture  of  certain  railway  special- 
ties, the  patents  for  which  were  owned  by  the  Canadian 
Car  and  Foundry  Company.^  Since  the  formation  of  this 
consolidation  the  company  has  built  new  plants  at  Am- 
herst, Nova  Scotia,  Longue  Point,  Quebec,  and  at  Fort 
William,  Ontario,  and  in  1912  the  plant  of  the  Pratt  and 
Letchworth  Company  of  Brantford,  which  manufactures 
malleable  iron  castings,  was  acquired  through  the  control 
of  all  the  stock  by  the  Canada  Car  and  Foundry  Company. 
Thus,  the  Canada  Car  and  Foundry  Company,  producing 
about  85  per  cent  of  the  car-building  capacity  of  Canada, 
seems  in  an  especially  strong  position  with  its  assured  sup- 
ply of  semi-finished  materials. 

§  9.  On  various  occasions  American  capitalists  have  been 
charged  with  trying  to  corner  all  Canadian  ores  and  the 
Canadian  market  in  finished  products.  The  Texada  Is- 
land deposit  in  British  Columbia  has  been  supplying  an 
American  furnace.  The  Moose  Mountain  ore,  partly  owned 
by  American  capitalists,  is  being  shipped  to  the  United 
States.  It  is  said  that  ores  near  Port  Arthur  were  pur- 
chased in  1901  by  the  United  States  Steel  Corporation. ^ 
The  Oliver  Iron  Mining  Company  was  at  work  in  the  Ati- 
kokan  Range  in  1906,  collecting  information  on  ores  in  all 
directions.^  In  1912  the  report  was  cmrent  that  an  iron 
ore  deposit  near  Calgary,  Alberta,  was  controlled  by  the 
United  States  Steel  Corporation.*  This  corporation  is  sup- 

'  McCuaig's  Circular,  April  5,  1911. 

*  Monetary  Times,  vol.  xxxiv,  p.  1511. 

*  Iron  Age,  vol.  lxxviii,  p.  491.        *  Globe,  January,  1912. 


272    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

posed  to  be  holding  Canadian  ores  in  reserve  lest  they  fall 
into  the  hands  of  competitors.^ 

Through  the  American  Steel  and  Wire  Company,  the 
United  States  Steel  Corporation  is  supposed  to  have  con- 
trolled the  Canadian  market  in  certain  articles,  not  only 
through  the  o-oTiership  of  a  fenciag  vdre  and  fence  plant  at 
Hamilton,  Ontario,-  but  by  certain  agreements  with  the 
Canadian  Hardware  Association.  The  wire  manufac- 
turers were  forced  not  to  sell  direct  to  the  wholesale  hard- 
ware dealers  of  Canada.^  When  the  operation  of  the  Domin- 
ion Iron  and  Steel  Company's  rod  mill  broke  down  this 
arrangement,  agreements  were  made  with  the  Canadian 
Hardware  Association,  requiring  their  members  to  buy 
barbed  wire  from  the  Steel  Corporation,  which,  in  turn, 
guaranteed  a  10  per  cent  profit  to  the  jobbers,  and  handled 
the  trade  in  an  entirely  satisfactory  manner.  Although  the 
price  charged  was  one  at  which  English  firms  could  do 
business,  yet  no  jobber  would  buy  in  England;  for  an  at- 
tempt to  do  so  would  have  resulted  in  a  serious  reprisal  and 
the  refusal  of  the  Steel  Trust  to  sell  barbed  wire  to  such 
firms.  As  English  manufacturers  could  not  supply  all  the 
demand,  the  United  States  Steel  Corporation  has  had  a 
strong  weapon.*  It  is  relevant  to  note  that  apparently  no 
firms  produce  barbed  wire  in  Canada  at  the  present  time, 
whereas  several  produced  such  products  some  ten  years 
ago. 

In  1906  control  of  the  Dominion  Wire  Manufacturing 
Company  of  Montreal  was  secured  by  IVIr.  J.  J.  Farrell,  a 
director  of  the  United  States  Steel  Corporation;  but  in  1910 
control  was  transferred  to  the  Steel  Company  of  Canada.^ 

More  recently  the  United  States  Steel  Corporation  has 
decided  to  build  a  plant  at  Sandwich,  Ontario.    It  has 

1  Jeans,  op.  cit.,  p.  120.        ^  Iron  Age,  vol.  lxxxiii,  p.  1380. 

'  Ibid.,  vol.  Lxxiii,  April  14,  p.  31. 

*  Ibid.,  vol.  Lxxiv,  August  11,  p.  12. 

^  Hardware  and  Metal,  vol.  x\aii,  February  17,  p.  30. 


THE   COMBINATION  MOVEMENT  273 

been  suggested  that  this  move  will  result  in  the  combination 
of  Canadian  firms  with  the  United  States  Steel  Trust. 
Whether  the  Steel  Trust  will  be  able  to  force  down  prices 
in  Canada,  or  whether  it  will  secure  control  of  Canadian 
firms,  only  the  future  can  determine. 

§  10.  Considerable  discussion  has  centered  in  the  pos- 
sibilities of  further  merging  of  the  Canadian  iron  and  steel 
interests  and  of  the  possible  present  interrelations  of  exist- 
ing companies.  In  1901  a  rumor  was  abroad  that  Mr. 
Morgan  had  bought  the  Sydney  Works  for  over  $50,000,- 
000,  but  Mr.  Clergue  and  iSIr.  Whitney  published  state- 
ments that  the  Canadian  industries  would  maintain  in- 
dependence, and  that  the  United  States  Steel  Corporation 
was  too  heavily  capitalized  to  give  troublesome  competi- 
tion.^ In  1903  it  was  said  that  Mr.  Clergue  was  a  director 
of  the  Canada  Iron  Furnace  Company,^  and  in  1905  the 
Lake  Superior  Company  was  reputed  to  be  holding  an 
interest  in  the  blast  furnace  at  Midland.^ 

Once  the  Canada  Iron  Corporation,  the  Dominion  Steel 
Corporation,  and  the  Steel  Company  of  Canada  were 
formed,  further  developments  were  expected.  "\Mien  inter- 
ests connected  with  both  the  Dominion  Steel  Corporation 
and  the  Steel  Company  of  Canada  met  in  Montreal  in 
June,  1900,  to  confer  on  the  question  of  a  possible  conflict 
in  the  choice  of  names  of  the  companies,*  the  report  was 
circulated  that  negotiations  were  pending  for  a  merger  of 
the  two  companies.^  The  presence  of  three  gentlemen  con- 
nected with  these  companies  in  England  in  August  of  1910 
was  seized  upon  as  further  evidence  of  a  forthcoming 
merger.^  Moreover,  Mr.  William  ]\IcMaster  was  a  director 

1  Morang's  Register,  1901,  pp.  93-95. 

2  Iron  Age,  vol.  LX\^,  December  27,  p.  17. 

*  Iron  Trade  Revieu;  vol.  xxx^^II,  February  2,  p.  66. 

*  Monetary  Times,  vol.  xliv,  p.  2412. 

^  Commercial  and  Financial  Chronicle,  vol.  xc,  p.  1556. 
^  Ibid.,  vol.  XLIV,  p.  429. 


274    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

of  both  the  Dominion  Steel  Corporation  and  the  Montreal 
Rolling  Mills,  ^  which  purchased  largely  from  the  Domin- 
ion Iron  and  Steel  Company. ^  The  Ontario  Tack  Com- 
pany ^  and  the  Dominion  Wire  Manufacturing  Company  * 
had  also  been  customers  of  the  Dominion  Iron  and  Steel 
Company,  When  the  Steel  Company  of  Canada  decided 
to  build  wire-rod  mills  of  its  own  to  supply  its  own  plants, 
the  Dominion  Steel  Corporation  announced  that  it  would 
erect  its  own  wire  and  nail  mills  as  a  customer  to  take  the 
place  of  those  it  was  losing.^  But  shortly  a  report  was  issued 
that  the  Steel  Company  of  Canada  would  not  build  wire- 
rod  mills  and  that  the  Dominion  Steel  Corporation  would 
not  build  wire  nail  or  screw  works. ^  In  spite  of  this,  both 
companies  have  followed  the  original  plans  and  have  built 
mills  for  the  production  of  intermediate  products  and  fin- 
ished products  respectively. 

A  fight  for  the  control  of  the  Nova  Scotia  Steel  and  Coal 
Company  aroused  a  similar  discussion  in  1910  and  1911. 
At  the  end  of  1909  a  stock  bonus  of  20  per  cent  was  given 
to  the  stockholders,  and  a  dividend  was  declared.  That  an 
imusual  influence  was  at  work  was  soon  evident.  "Scotia" 
became  one  of  the  most  prominent  stocks  in  the  daily  list 
of  sales.  It  was  said  that  a  syndicate,  including  Mr. 
Rodolphe  Forget,  actually  had  control  of  the  company, 
but  that  at  the  last  moment  a  slip  was  made  and  the  previ- 
ous control  was  retiu-ned  to  power.  A  peaceful  solution  was 
reached  through  the  purchase  of  the  Forget  interests  by 
Mr.  Harris,  the  president.'^  Some  believed  that  Mr.  Forget 
wished  to  make  "Scotia"  the  basis  of  a  large  Canadian 
steel  and  coal  merger,^  but  little  attention  was  paid  to  this 

^  Commercial  and  Financial  Chronicle,  vol.  xlv,  p.  48. 

2  Monetary  Times,  vol.  xlv,  p.  48.       ^  Iron  Age,  vol.  lxxv,  p.  221. 

*  Hardware  and  Metal,  vol.  xxii,  June  H,  p.  38. 

^  Monetary  Times,  vol.  xliv,  p.  2514. 

^  Hardware  and  Metal,  vol.  xxn,  June  25,  p.  42. 

^  Monetary  Times,  vol.  xlv,  p.  424. 

8  Globe,  March  10,  p.  10. 


THE  COMBINATION  MOVEIVIENT  275 

rumor  which  was  generally  regarded  as  premature.^  Yet 
"  the  industrial  tendency  of  the  day  is  toward  such  com- 
bination. With  increasing  competition  and  a  growing 
market,  a  consolidation  is  not  unlikely."^  "The  present 
tendency  will  not  be  stayed.  Before  many  years  we  may 
have  a  great  steel  company  controlling  the  Canadian 
market  and  wielding  considerable  power  and  fostering  an 
export  trade.  The  difl&culties  in  the  way  of  amalgamation 
are  being  overcome  by  the  merger  of  five  companies  in  the 
Steel  Company  of  Canada.  The  steel-coal  merger  was  a 
side-step,  but  not  backward."  ^  Such  was  the  comment  of 
the  Monetary  Times^ 

§  11.  The  causes  and  character  of  this  combination 
movement  are  not  easily  described.    Most  of  the  amal- 

1  Monetary  Times,  vol.  xlv,  p.  524.  ^  Ibid.,  p.  911. 

»  Ibid.,  vol.  XLiv,  p.  2412. 

*  Other  mergers  have  been  organized  from  time  to  time.  In  1910  the 
Canadian  Machinery  Corporation  was  formed  to  include  the  MacGregor, 
Gourlay  and  Company  of  Gait,  G.  Ballantyne  and  Company  of  Preston, 
the  Hespeler  Machinery  Company,  the  Goldie  and  McCullock  Company 
of  Gait,  and  the  Sussex  Manufacturing  Company  of  New  Brunswick, 
practically  all  the  firms  in  Canada  manufacturing  woodworking  ma- 
chinery and  tools.  The  Smith's  Falls  Malleable  Castings  Company,  the 
McKinnon  Dash  and  Metal  Company  of  St.  Catharines,  and  other  com- 
panies in  Brantford  and  Walkerville,  manufacturing  malleable  castings 
for  railroads,  agricultural  implements,  and  automobiles,  were  merged  in 
1910.  In  the  same  year  the  Expanded  Metal  Company,  the  King  Radia- 
tor Company,  the  Dominion  Radiator  Company,  and  Taylor-Forbes 
Company,  all  the  firms  in  this  line  of  business  in  Canada,  were  consoli- 
dated as  the  Steel  and  Radiation  Company  with  a  capital  of  $5,000,000. 
In  1912  the  Metal  Sheeting  and  Siding  Company  absorbed  the  A.  B. 
Ormsby  Company,  raising  the  capitalization  from  $700,000  to  $1,500,- 
000.  The  Canada  Foundries  and  Forgings  Company  was  capitalized  at 
$3,000,000  to  take  over  the  Canadian  Billings  and  Spencer,  Ltd.,  the 
James  Smart  Manufacturing  Company,  Ltd.,  and  the  Canada  Forge, 
Ltd.  In  1884  the  Gananoque  Spring  and  Axle  Company  was  formed  to 
consolidate  the  Gananoque  Spring  Company  and  the  Byers  Manufac- 
turing Company,  manufacturers  of  axles  at  Gananoque.  In  1890  the 
properties  of  the  Dowsley  Spring  and  Axel  Company  of  Chatham,  On- 
tario, were  purchased.  In  1913  the  Ontario  Steel  Products  Company  was 
formed  to  acquire  the  properties  of  the  Gananoque  Spring  and  Axle  Com- 
pany and  the  D.  F.  Jones  Manufacturing  Company  of  Gananoque. 


276    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

gamations  are  so  recent  that  the  effect  of  combination  on 
earnings  cannot  possibly  be  separated  from  the  effects  of 
other  influences.  It  is  very  difficult  to  gain  any  idea  of  the 
earning  power  of  the  corporations  for  two  or  three  years 
at  the  least.  It  may  be  said  that  there  is  little  evidence  of 
a  decrease  of  working  expenses,  especially  as  larger  salaries 
have  been  found  necessary  or  desirable  for  men  capable  of 
taking  charge  of  the  combinations.^  It  is  a  noteworthy  fact 
that  most  of  the  combinations  have  consolidated  plants 
manufacturing  different  kinds  of  products.  Companies 
producing  finished  articles  have  secured  control  of  raw 
materials  such  as  coal,  ore,  and  limestone,  or  intermediate 
products  such  as  wire  rods,  steel  castings,  and  pig  iron.  In 
other  cases  a  market  for  pig  iron  or  steel  has  been  assured 
by  such  mergers  as  the  Steel  Company  of  Canada.  In  the 
case  of  the  Nova  Scotia  Steel  and  Coal  Company  and 
the  Canada  Iron  Corporation,  allied  or  identical  interests 
have  been  simply  consolidated  under  one  organization  and 
management. 

The  forms  of  consolidation  have  been  varied.  The  lease 
of  the  plant  with  a  guaranty  of  interest  on  bonds  and  divi- 
dends on  stocks  has  been  used  by  the  Dominion  Steel  Cor- 
poration, and  a  guaranty  of  interest  and  dividends  was  the 
method  used  in  connection  with  the  control  of  the  Cana- 
dian Steel  Foundries  by  the  Canada  Car  and  Foundry 
Company.  Informal  "gentlemen's  agreements"  may  or 
may  not  have  existed.  Factor  agreements  were  used  by 
the  United  States  Steel  Corporation  to  control  some  lines 
of  the  hardware  trade.  Contracts  between  certain  firms 
might  even  be  regarded  as  a  form  of  consolidation.  It  is 
said  that  at  times  the  marketing  of  such  products  as  steel 
rails  has  been  controlled  by  one  firm,  Drummond,  Mc- 
Call  and  Company  of  Montreal,^  as  the  selling  bureau. 
Of  late,  the  holding  company  seems  to  be  the  more  popular 

1  Financial  Post,  October  22,  1910,  p.  2. 
^  Industrial  Canada,  vol.  v,  p.  380. 


THE  COMBINATION  MO\^MENT  277 

form,  as  in  the  case  of  the  Dominion  Steel  Corporation,  the 
Lake  Superior  Corporation,  and  the  Canada  Car  and 
Foundry  Company.  Usually,  however,  the  plants  have 
been  purchased  outright  and  the  previous  stockholders 
receive  bonds  and  stocks,  part  of  which  may  be  a  bonus 
for  their  previous  ownership  or  holdings.  The  existence  of 
interlocking  directorates  cannot  be  denied. 

Various  causes  or  reasons  for  consolidation  have  been 
set  forth.  The  assurance  of  a  market  for  raw  or  intermedi- 
ate materials,  the  saving  of  wastes  of  competition  in  the 
form  of  excessive  costs  of  marketing,  selling  and  delivery, 
the  specialization  of  plants,  and  the  repression  of  labor 
unions  have  seemed  desirable  ends;  but  there  is  little  evi- 
dence that  much  has  been  accomplished.  It  is  true  that 
the  Dominion  Steel  Corporation  ended  a  strike  that  prob- 
ably would  have  been  ended  in  some  other  way.  The  ac- 
quisition of  sources  of  raw  materials  or  an  outlet  for  such 
raw  and  intermediate  materials  seems  to  be  the  most  valu- 
able industrial  feature  of  consolidation. 

Charges  have  been  made  that  one  other  cause  of  con- 
solidation has  been  the  promotion  activities  of  a  few  Cana- 
dian financiers.  No  doubt  the  promoters  have  not  gone 
unrewarded.  A  table  of  the  securities  issued  by  the  con- 
stituent and  the  amalgamated  companies  reveals  some 
interesting  facts. 

The  increase  of  actual  capitalization,  including  bonds, 
amounts  to  about  $27,000,000,  of  which  $24,000,000  was 
produced  in  connection  with  companies  consolidated  by 
Sir  Max  Aitken;  namely,  the  Canada  Car  and  Foundry 
Company  and  the  Canadian  Steel  Foundries,  and  the 
Steel  Company  of  Canada.  As  the  capitalization  of  the 
constituent  companies  of  the  Dominion  Steel  Corporation^ 
is  some  $23,000,000  greater  than  that  of  the  holding  com- 

^  The  overcapitalization  of  the  Dominion  Iron  and  Steel  Company  be- 
fore it  was  combined  with  the  Dominion  Coal  Company  was  probably 
nearly  $12,000,000. 


278    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

Table  of  Securities  issued 


Company 

Capital  be- 
fore amal- 
gamation, 
including 
bonds 

Capital  after  amalgamation  — 
issued 

Total 

Total 

Bonds 

Preferred 

Common 

Canada  Bolt  and 
Nut 

Canada  Machinery 
Corporation 

Canadian  Car  and 
Foundry  Co 

Canadian  Steel  Cor- 
poration  

Dominion  Steel 
Corporation 

Steel  Company  of 
Canada 

Steel  and  Radia- 
tion  

Canada  Foundries 
and  Forcings 

Metal  Sheeting  and 

$935,000 

1,710.000 

11,200,000 

1,800,000 

07,461,500 

9,969,500 

435,500 

600,000 

700,000 

$650,000 

400,000 

3,500,000 

3,650,000 

1,500,000 

8,000,000 

800,000 

67,000 

$900,000 

908,800 

6,100,000 

1,400,000 

7,000,000 

6,496,300 

279,600 

960,000 

500,000 

$900,000 
653,400 
3,875,000 
3,000,000 
35,656,800 
11,300,000 
1,068,900 
960,000 
1,000,000 

$2,450,000 
1,962,2(10 

13,475,000 
8,050,000 

44,150,800 

25,996,300 
1,648,500 
1,987,000 
1,500,000 

$3,500,000 
4,000,000 
20,000,000 
10,000,000 
52,500,000 
40,000,000 
0,500,000 
8,000,000 
1,500,000 

$84,711,500 

$18,067,000 

$24,544,700 

$58,614,100 

$101,225,800 

$141,000,000 

pany,  the  increase  of  capitalization  of  the  other  iron  and 
steel  companies  seems  to  have  been  even  greater  than  ap- 
pears on  the  sm'face. 


§  12.  Besides  the  obvious  mergers  and  combinations  of 
firms,  some  community  of  interest  between  corporations 
seems  to  have  existed  from  time  to  time.  Several  of  the 
interrelationships^  have  already  been  noted  in  cases  where 
the  corporations  have  since  been  united,  as  in  the  case  of 
the  Dominion  Steel  Corporation,  the  Steel  Company  of 
Canada,  and  the  Canada  Iron  Corporation. 

In  1899  $6,000,000  of  bonds  were  issued  ^  along  with 
$5,000,000  of  7  per  cent  cumulative  preferred  stock  on 
which  dividends  were  payable  during  the  period  of  develop- 
ment.^ Underwriters  secured  the  bonds  at  90,  and  each 
$500  bond  carried  the  right  of  subscription  to  fifteen  shares 
of  stock  at  $15  per  share.*  An  option  of  $80  per  share  on 
$2,000,000  of  the  preferred  stock  was  reported.^  There  was 

1  See  Appendix  I. 

*  Commercial  and  Financial  Chronicle,  vol.  lxix,  p.  553. 
3  Monetary  Times,  vol.  xxxiv,  p.  886. 

*  Commercial  and  Financial  Chronicle,  vol.  lxxi,  p.  122. 
6  Ibid.,  vol.  LXXii,  p.  778. 


THE  COMBINATION  MO\TMENT  279 

undoubtedly  an  initial  overcapitalization  of  from  $7,000- 
000,  to  $8,000,000,  omitting  discounts  on  bonds  and  pre- 
ferred stock.  The  $10,000,000  of  common  stock  must  have 
sold  for  about  $1,500,000.  The  bonds  were  discounted  for 
about  $600,000.  The  preferred  stock  was  sold  at  about  20 
below  par,  a  loss  of  about  $1,000,000.  In  1901  $5,000,000 
more  of  common  stock  was  issued  at  60,  involving  a  further 
overcapitalization  of  about  $1,750,000.^  As  no  depreciation 
account  was  provided  until  1907  to  1908,  the  situation  was 
further  aggravated.  The  increased  value  of  the  Bell  Island 
ore  deposits  is  the  only  factor  redeeming  an  over-capitaliza- 
tion that  might  be  estimated  as  high  as  $11,850,000.  Mr. 
William  McMaster,  Hon.  H.  Montague  Allen,  and  Hon. 
Robert  MacKay  were  members  of  the  board  of  directors 
of  the  Montreal  Rolling  Mills,  previous  to  its  consolida- 
tion in  the  Steel  Company  of  Canada.^  Mr.  McMaster  is 
now  a  director  of  the  Steel  Company  of  Canada.  INIr. 
T.  J.  Drummond,  of  the  Canada  Iron  Corporation,  who 
was  a  director  of  the  Lake  Superior  Corporation  after  its 
reorganization  in  1905,  became  president  in  1908.^  Mr. 
H.  R.  Drummond,  Mr.  G.  E.  Drummond,  and  Mr.  Edgar 
McDougall  were  on  the  board  of  directors  of  the  Cumber- 
land Coal  and  Railway  Company,  prior  to  its  absorption 
by  the  Dominion  Steel  Corporation.'*  In  1910  Mr.  J.  R. 
WUson,  of  the  Dominion  Coal  Company  and  Dominion 
Steel  Corporation,  was  added  to  the  directorate  of  the 
Nova  Scotia  Steel  Company,  together  with  Mr.  K.  W. 
Blackwell,  of  the  Montreal  Steel  Works.  Mr.  Blackwell 
was  supposed  to  be  interested  also  in  the  Dominion  Steel 
Corporation.^ 

A  general  survey  of  the  1912  directorates  of  iron  and 
steel,  railway  and  banking  companies  reveals  the  following 

1  Ibid.,  vol.  Lxxiv,  p.  530. 

^  Canadian  Engineer,  vol.  10,  p.  84. 

'  Canada,  Reports  on  Mining  and  Metallurgical  Industries,  p.  324. 

*  Ibid.,  p.  363.  ^  Monetary  Times,  vol.  xlv,  p.  619. 


280    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

facts:  Mr.  T.  J.  Drummond '  was  president  of  the  Canada 
Iron  Corporation  and  of  the  Lake  Superior  Corporation 
and  was  on  the  board  of  directors  of  the  Cockschutt  Plow 
Company  and  one  bank.  Mr.  G.  E.  Drummond  was  on 
the  boards  of  the  Canada  Iron  Corporation,  the  Canada 
Car  and  Foundry  Company,  the  Cockschutt  Plow  Com- 
pany, and  one  bank.  Mr.  H.  Cockschutt  was  on  the  boards 
of  the  Canada  Iron  Corporation,  and  was  President  of  the 
Cockschutt  Plow  Company.  Mr.  Robert  Hobson  was 
president  of  the  Steel  Company  of  Canada,  and  was  on  the 
boards  of  a  loan  company  and  the  Cockschutt  Plow  Com- 
pany. Mr.  C.  A.  Birge  and  Mr.  C.  S.  Willcox,  of  the  Steel 
Company  of  Canada,  were  also  members  of  boards  of  di- 
rectors of  banks.  Mr.  H.  S.  Holt  was  on  the  boards  of  the 
Steel  Company  of  Canada,  the  Canada  Car  and  Foundry 
Company,  and  a  bank;  Hon.  William  Gibson,  of  the  same 
company,  had  a  place  on  the  directorate  of  a  bank  and  of 
a  loan  company.  Mr.  W.  D.  Matthews  was  a  member  of 
the  boards  of  the  Dominion  Steel  Corporation,  the  Steel 
Company  of  Canada,  a  bank,  a  loan  company,  a  naviga- 
tion company,  and  three  railways.  Mr.  J.  Hamilton  Benn 
was  the  London  representative  on  the  boards  of  the  Steel 
Company  of  Canada,  the  Canada  Iron  Corporation,  and 
the  Canada  Car  and  Foundry  Company.  Mr.  James  Red- 
mond was  on  the  boards  of  the  Canada  Car  and  Foundry 
Company,  the  Canada  Locomotive  Company,  and  a  bank. 
Hon.  R.  Jaffray  was  a  director  of  the  Nova  Scotia  Steel 
and  Coal  Company,  a  loan  company,  one  bank,  and  a  rail- 
way. Sir  Max  Aitken,  the  promoter,  was  on  the  boards  of 
the  Steel  Company  of  Canada,  the  Canada  Iron  Corpora- 
tion, the  Canada  Car  and  Foundry  Company,  and  one 
railway.  Mr.  K.  W.  Blackwell  was  a  director  of  the  Nova 
Scotia  Steel  and  Coal  Company  and  the  Canadian  Steel 
Foundries.  Mr.  N.  Curry  was  president  of  Canadian  Steel 
Foundries  and  the  Canada  Car  and  Foundry  Company, 
^  Ill-health  has  caused  his  resignation  since  1912. 


THE  COMBINATION  MOVEMENT  281 

and  a  director  of  a  bank  and  of  a  coal  company.  Of  the 
directors  of  the  three  boards  of  the  Dominion  Coal  Com- 
pany, Mr.  J.  H.  Plummer  was  president  of  all  three,  and 
was  a  director  of  one  railway.  Sir  William  Mackenzie  was 
on  one  bank  board,  one  railway  board,  and  was  president 
of  the  Atikokan  Iron  Company  and  a  director  of  Moose 
Mountain,  Ltd.  Sir  Henry  Pellatt  was  connected  with 
Steel  and  Radiation,  a  navigation  company,  and  a  railway 
company.  Mr.  J.  R.  Wilson  was  a  director  of  the  Canadian 
Steel  Foundries,  and  the  Canada  Car  and  Foundry  Com- 
pany. Mr.  H.  M.  Molson,  Sir  H.  M.  Allan,  Mr.  George 
Caverhill,  Hon.  R.  Dandurand,  Hon.  R.  Mackay,  Mr. 
WilUam  McMaster,  Sir  W.  E.  Van  Home,  Senator  Cox, 
Mr.  F.  Nicholls,  Mr.  E.  R.  Wood,  and  Colonel  James 
Mason  were  connected  with  banking  and  transportation 
companies. 

§  13.  The  question  of  the  actual  power  of  industrial 
combination  in  Canada  is  answered  by  a  glance  at  the  list 
of  directors  cited  above  and  their  relations  to  various  com- 
panies, which  indicates  that  in  some  way  or  other  every 
company  of  any  importance  was  related  to  every  other. 
One  director,  Mr.  Blackwell,  of  the  Nova  Scotia  Steel  and 
Coal  Company,  which  seems  farthest  removed  from  the 
other  large  companies,  could  meet  on  the  board  of  the 
directors  of  the  Canada  Car  and  Foundry  Company,  and 
its  subsidiary  Canadian  Steel  Foundries,  directors  of  the 
Lake  Superior  Corporation,  the  Canada  Iron  Corporation, 
the  Steel  Company  of  Canada,  the  Dominion  Steel  Cor- 
poration, the  Canada  Locomotive  Company,  and  the  Cock- 
schutt  Plow  Company.  Furthermore,  Mr.  Blackwell  was 
interested  in  the  industrial  end  of  these  enterprises  and  his 
relation  to  each  was  no  formal  affair.  Yet  this  grouping  of 
directors  from  various  interests  in  this  company  may 
simply  indicate  an  attempt  to  insure  friendly  relations  be- 
tween that  and  the  larger  companies.  Certamly,  the  Cana- 


282    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

dian  iron  and  steel  industry  is  not  "dominated"  by  the 
Canadian  Car  and  Foundry  Company.  Often  directors  are 
chosen  merely  for  their  prominence  in  the  financial  inter- 
ests of  Canada.  The  interests  of  Sir  Max  Aitken,  INIr. 
Henry  S.  Holt,  Sir  Henry  Pellatt,  Mr.  W.  D.  Matthews,  and 
Sir  William  Mackenzie,  as  well  as  Mr.  J.  Hamilton  Benn, 
of  London,  England,  are  likewise  chiefly  financial.  Mr. 
T.  J.  Drummond's  relations  to  the  Lake  Superior  Corpora- 
tion, the  Canada  Iron  Corporation,  and  the  Canadian  Car 
and  Foundry  Company  were  more  nearly  of  an  industrial 
character. 

It  is  not  to  be  understood  that  any  one  corporation, 
through  the  attachments  of  its  boards  of  directors,  con- 
trols all  the  other  companies.  The  most  one  can  say  is  that 
the  relations  are  intimate  enough  to  render  improbable 
any  severe  competition  between  the  various  companies. 

In  fact,  there  seems  to  be  little  room  for  competition. 
The  Steel  Company  of  Canada  controls  nearly  all  the 
large  bolt  and  nut  and  screw  plants,  and  produces  over 
fifty  per  cent  of  the  nail  output.  The  Nova  Scotia  Steel 
and  Coal  Company  puts  on  the  market  a  class  of  articles 
produced  by  no  other  large  firm  in  Canada.  The  Canada 
Iron  Corporation  devotes  its  pig-iron  output  to  the  man- 
ufacture of  car  wheels  and  pipes,  of  which  it  has  almost  a 
natural  monopoly  because  of  the  character  of  the  pig  iron 
produced.  The  Canadian  Steel  Foundries  has  consolidated 
two  important  steel-castings  firms  whose  products  are  now 
used  by  the  Car  and  Foundry  Company.  The  Steel  and 
Radiation,  Ltd.,  competes  with  none  of  the  large  iron  and 
steel  companies ;  it  simply  receives  raw  materials  for  use  in 
the  manufacture  of  its  own  special  line  of  products.  The 
Canada  Locomotive  Company  and  the  Cockschutt  Plow 
Company  are  highly  specialized  concerns.  The  Atikokan 
Iron  Company  caters  to  the  Western  trade,  and  Moose 
Mountain,  Ltd.,  ships  ores  to  the  United  States. 

The  various  large  iron  and  steel  companies  in  Canada 


THE  COMBINATION  MOVEMENT  283 

are  each  devoted  to  the  manufacture  of  a  special  line  of 
product,  and,  therefore,  come  into  competition  with  only 
those  companies  or  firms  so  small  that  they  do  not  attract 
public  notice.  Competition  or  its  possibility  does  exist  in 
the  wire  and  nail  market  between  the  Dominion  Steel 
Corporation  and  the  Steel  Company  of  Canada,  as  well  as 
with  a  few  small  firms  which  are  able  to  secure  a  certain 
following  trade.  The  Dominion  Steel  Corj^oration  may 
compete  with  the  Lake  Superior  Corporation  in  the  rail 
market,  and  there  might  be  competition  in  the  pig-iron  and 
steel-billet  market  were  it  not  that  the  companies  consume 
a  large  percentage  of  their  own  output.  The  United  States 
Steel  Corporation  completely  dominates  the  barbed-wire 
market  since  Canadian  production  has  disappeared.  Mal- 
leable castings  are  practically  monopolized  by  a  merger  of 
the  larger  companies. 

It  is  a  safe  conclusion  that  the  Canadian  iron  and  steel 
industry  is  rather  successfully  controlled  in  its  various 
branches  by  the  combinations  producing  such  lines  of  pro- 
ducts as  have  been  described  above.  While  there  may  be 
internal  competition  in  the  production  of  wire  rods,  wire, 
wire  nails,  and  rails,  it  is  never  so  serious  as  to  depress 
prices  unduly.  The  chief  competition  must,  therefore, 
come  from  the  United  States  Steel  Corporation;  but  this 
competition  is  partially  checked  by  duties  and  the  dump- 
ing clause.  In  a  few  cases  the  United  States  Steel  Cor- 
poration has  been  able  to  dominate  completely  the  Cana- 
dian market  at  its  own  prices;  for  instance,  in  barbed  wire, 
and  at  times  in  wire  rods.  No  part  of  the  Canadian  iron 
and  steel  trade  is  in  serious  danger  of  destructive  competi- 
tion. 

The  possibility  of  an  amalgamation  of  all  Canadian  iron 
and  steel  plants  offers  dangerous  ground  for  prophecy. 
There  is  always  the  possibility  that  the  principle  of  large- 
scale  production  and  of  integration  of  industry  may  shortly 
involve  the  various  firms  in  a  competition  necessitating 


284    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

further  consolidations.  The  competition  of  the  Dominion 
Steel  Corporation  and  the  Steel  Company  of  Canada  in  the 
hardware  trade  is  practically  assured  for  the  immediate 
future,  and  the  United  States  Steel  Corporation  plant  may 
strengthen  this  situation.  A  possible  amalgamation  would 
have  to  include  the  Canadian  branch  of  the  Steel  Corpora- 
tion. A  merger  programme  of  this  character  is  a  possibility, 
but  it  is  impossible  to  predict  the  course  of  events.  The 
rapid  expansion  of  the  market  for  nearly  all  iron  and  steel 
products  indicates  that  there  is  no  immediate  necessity  for 
such  a  policy. 

§  14.  Custom  and  popular  feeling  attribute  the  trust 
movement  to  the  tariff  and  other  forms  of  protection. 
Since  this  supposed  relation  is  likely  to  be  much  discussed 
in  Canada  in  the  near  future,  it  is  important  to  consider 
the  relation  of  protection  to  the  trust  movement  in  Canada. 

The  earliest  combines  in  the  iron  and  steel  industry  in 
Canada  followed  overproduction  and  excessive  competi- 
tion in  the  early  nineties.  The  tariff,  together  with  the 
character  of  the  business,  overstimulated  the  hardware 
branch  of  the  industry.  At  the  same  time  the  tariff  gave 
the  Canadian  producers  a  reason  to  combine,  assisted  them 
to  combine  by  limiting  the  number  of  competitors  to  the 
home  producers  alone,  and  permitted  them,  once  they  had 
combined,  to  raise  prices  behind  the  tariff  wall.  Many  of 
these  firms  are  now  consolidated  in  the  Steel  Company  of 
Canada,  which  produces  finished  goods  that  are  protected 
by  duties  varying  from  25  to  35  per  cent.  This  company 
produces  over  fifty  per  cent  of  the  Canadian  output  of 
nails ;  small  manufacturers  have  an  output  of  about  thirty 
per  cent  of  the  Canadian  product;  and  the  Dominion  Steel 
Corporation,  with  its  ally,  the  J.  Pender  Company  of  St. 
John,  produces  the  rest.  As  it  is  generally  recognized,  how- 
ever, that  the  Dominion  Steel  Corporation  and  the  Steel 
Company  of  Canada  have  an  agreement  to  avoid  competi- 


THE  COMBINATION  M0\T2]VIENT  285 

tion,  if  possible,  these  large  companies  are  probably  getting 
the  full  benefit  of  the  tariff. 

The  output  of  steel  rails  receives  the  full  benefits  of  pro- 
tection. As  there  are  only  two  rail  mills,  which  are  said  to 
market  their  product  through  a  common  selling  bureau, 
there  is  no  effective  competition  between  Canadian  firms. 
Two  firms  could  easily  come  to  agreement  if  there  were 
danger  of  losing  the  value  of  the  tariff  through  competi- 
tion. 

To  the  extent  to  which  the  different  companies  specialize, 
they  are  in  a  position  to  get  the  full  benefit  of  the  tariff. 
In  this  respect  the  Nova  Scotia  Steel  Company,  which 
produces  practically  all  the  large  forgings  made  in  Canada, 
seems  specially  favored. 

The  internal  arrangement  of  the  iron  and  steel  schedule 
may  have  an  effect  on  the  integration  movement  in  the 
Canadian  iron  and  steel  industry.  ^Vliat  is  the  probability 
that  a  Canadian  firm  would  undertake  to  produce  steel 
rails  wdthout  an  efficient  blast-furnace  plant  and  steel  fur- 
naces? Obviously,  while  the  duties  on  pig  iron  and  on 
steel  billets  would  put  the  independent  companies  at  a 
disadvantage,  the  pig  iron  and  billet  departments  of  the 
Algoma  Steel  Corporation  and  the  Dominion  Steel  Cor- 
poration would  gain  what  their  rail  mills  would  lose  from 
nominally  increased  prices  of  pig  iron  and  billets.  Any 
firm  that  did  undertake  such  a  scheme  would  shortly  be 
forced  to  join  forces  with  one  or  both  of  the  mills  previously 
in  operation. 

In  the  same  way  an  advance  of  duties  on  pig  iron  and 
steel  billets  might  also  tend  to  push  the  movement  for 
integration  still  further  into  all  branches  of  the  finishing 
industry,  especially  into  lines  in  which  the  large  companies 
with  blast  furnaces  and  steel  furnaces  already  have  a  large 
output.  Although  integration  of  industry  may  have  in- 
dustrial advantages,  the  tariff,  by  increasing  the  cost  of  the 
raw  materials  of  independent  firms,  would  drive  them  off 


286    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  margin  of  profitable  production  and  restrict  competi- 
tion. 

This  principle  may  be  illustrated  by  the  probable  effects 
of  the  recent  increase  of  duties  on  wire  rods.  It  seems 
strange  that  the  Dominion  Steel  Corporation  and  the  Steel 
Company  of  Canada  should  need  duties  on  wire  rods  when 
the  large  part  of  their  output  is  turned  into  highly  pro- 
tected finished  products  in  their  own  mills.  The  price  of 
these  finished  products  need  not  be,  and  in  all  probability 
will  not  be,  higher  than  before,  since  the  duties  on  these 
have  not  been  increased.  There  is  obviously  no  advantage 
to  these  companies  in  having  their  rod  mills  charge  up 
their  respective  nail  factories  with  higher  prices  for  rods. 
The  only  apparent  advantage  in  the  duties  is  the  possibil- 
ity of  raising  the  prices  of  rods  to  outside  nail  firms.  If  the 
rod  mills  succeed  in  so  doing,  the  independent  firms  may  be 
forced  out  of  business  and  the  two  large  companies  could 
then  get  the  full  advantage  of  the  tariff  on  finished  products 
and  on  the  raw  material  (rods)  as  well.  Facing  failure 
through  higher  costs  of  production,  the  independent  firms 
may  be  glad  to  sell  out  to  the  larger  companies. 

During  revision  of  the  iron  and  steel  schedule  this  point 
should  be  kept  clearly  in  mind.  Integration  will  no  doubt 
continue  to  spread  in  Canadian  industry,  but  it  would  be 
well  that  it  should  be  based  on  industrial  efficiency  rather 
than  on  artificial  tariff  barriers  on  raw  materials  which 
force  the  smaller  firms  out  of  business  and  restrict  the 
field  of  competition. 


CHAPTER  XI 

THE  CAUSES  OF  RECENT  PROGRESS 

§  1.  Not  only  is  the  iron  and  steel  industry  the  modern 
barometer  of  trade,  but  its  development  reflects,  probably 
more  than  that  of  any  other  industry,  the  influence  of  a 
network  of  industrial  and  economic  factors.  The  influence 
of  these  in  early  periods  we  have  already  considered.  Par- 
ticular care  has  been  taken  in  considering  the  eflFect  of  pro- 
tection because  it  has  been  the  subject  of  so  much  public 
discussion.  Certain  phases  of  the  protective  policy  in  the 
last  two  decades  have  been  discussed  so  far  as  was  possible, 
before  outlining  the  growth  of  the  industry.  It  is  the  pur- 
pose of  this  chapter,  first  to  consider  other  causes  of  the 
recent  progress,  and  then  to  estimate  the  influence  of  pro- 
tection on  the  development  of  the  industry  in  recent  years. 
A  final  chapter  will  be  devoted  to  considering  whether  or 
not  the  protective  policy  has  been  a  wise  one,  especially 
during  the  last  period  of  Canadian  industrial  history,  and 
whether  or  not  it  should  be  retained  or  how  it  should  be 
modified  as  the  programme  of  the  future. 

§  2.  In  the  development  of  any  industry  the  availability 
of  raw  materials  is  of  primary  importance,  and  in  Canada 
this  has  been  the  most  favorable  condition.  Nova  Scotia 
has  been  able  to  develop  an  iron  industry  because  of  the 
unlimited  supply  of  iron  ore  of  satisfactory  quality,  and 
an  unlimited  supply  of  coal  at  points  to  which  the  ore  can 
be  cheaply  carried.  Though  the  furnaces  at  Bridgeville  and 
at  Ferrona  have  been  abandoned  on  account  of  lack  of 
ores,  the  Nova  Scotia  Steel  and  Coal  Company  has  ex- 
panded its  operations  by  building  at  Sydney  Mines  a  blast 


288    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

furnace  to  use  coal  from  areas  purchased  in  1900,  and 
Wabana  ore  previously  used  at  Ferrona,  but  more  con- 
veniently shipped  to  the  coal  areas  at  Sydney  Mines,  Like- 
wise, the  Sydney  establishment  has  been  made  possible  by 
the  existence  of  the  Newfoundland  ore  supplies  and  the 
Glace  Bay  coal  areas,  conditions  which,  as  we  have  seen, 
would  have  assured  the  building  of  an  important  iron  and 
steel  plant  whether  or  not  the  bounties  had  been  renewed 
in  1899. 

Furnaces  were  built  at  Sault  Ste.  Marie  under  like  cir- 
cumstances. The  discovery  of  the  Helen  Mine  inspired  the 
addition  of  a  new  department  to  the  "Soo"  industries. 
Unfortunately  the  ore  did  not  turn  out  to  be  of  Bessemer 
quality,  but  the  industry,  once  begun,  was  carried  on  to 
success  by  using  American  ore  secured  in  the  Lake  Superior 
region.  More  recently,  since  basic  open-hearth  furnaces 
have  been  installed,  it  has  been  decided  that  the  Helen 
Mine  ore  is  too  valuable  to  sell  to  outsiders.  The  Atikokan 
Iron  Company  was  incorporated  after  the  discovery  of 
ores  west  of  Port  Arthur,  and  the  Midland  Furnace  was 
built  in  1899  to  use  Helen  Mine  and  other  Ontario  ores. 
The  industry  of  Quebec  is  based  on  bog  ores  that  produce 
iron  of  very  superior  quality,  and  what  little  success  the 
Londonderry  plant  has  had  was  based  on  the  mixture  of  a 
number  of  Canadian  ores.  The  availability  of  foreign  ores 
and  the  admission  of  iron  ore  free  of  duty  has  been  of  great 
advantage  to  the  primary  industry  in  Canada.  Notwith- 
standing the  difiference  in  the  bounties  on  iron  made  from 
native  ore  and  iron  made  from  foreign  ore,  the  annual  out- 
put of  iron  made  from  native  ore  has  amounted  to  only 
62,000  tons  in  1894,  20,000  tons  in  1898,  130,000  tons  in 
1910,  and  53,000  tons  in  1911,  while  the  production  of  iron 
made  from  foreign  ore  has  steadily  increased  from  nothing 
in  1894  to  about  600,000  tons  in  1910.  There  is  some  evi- 
dence that  Canadian  ore  will  be  used  more  extensively  in 
the  near  future,  especially  in  Ontario,  where  ores  are  most 


THE  CAUSES  OF  RECENT  PROGRESS         289 

accessible.  In  the  past  there  has  been  *  a  considerable  ex- 
portation of  Canadian  ores,  amounting  to  more  than  the 
quantity  of  native  ores  charged  to  the  furnaces  between 
1902  and  1907,  but  in  recent  years  the  tendency  to  export 
Canadian  ores  is  diminishing.  While  about  half  of  the 
foreign  ^  ores  used  have  come  from  the  Lake  Superior 
regions  and  half  from  Newfoundland,  the  rapid  growth  of 
the  Ontario  industry  of  recent  years  puts  a  premium  on  the 
use  of  American  ores. 

It  is  a  safe  conclusion  that  the  Canadian  industry  would 
not  have  been  an  important  one,  had  it  not  been  for  the 
discovery  of  the  Michipicoten,  and  especially  the  Wabana, 
ores,  as  well  as  the  availability  of  American  ores. 

Related  to  this  condition  of  development  was  the  great 
supply  of  coal,  especially  in  Cape  Breton,  which  supplies 
about  half  of  the  coke  charged  to  the  furnaces.^  The  de- 
sirability of  securing  new  markets  for  the  output  of  the 
coal  of  the  Cape  Breton  areas  was  a  reason  for  beginning 
the  Sydney  industry.  The  importance  of  this  supply  of 
fuel  is  revealed  by  the  facts  that  in  1900  the  Nova  Scotia 
Steel  Company  purchased  the  coal  areas  of  the  General 
Mining  Association,  and  that  since  1909  the  Dominion  Iron 
and  Steel  Company  has  secured  control  of  the  Dominion 
Coal  Company  and  the  Cumberland  Coal  and  Railway 
Company. 

Ontario  is  situated  somewhat  differently  from  the  Mari- 
time Provinces,  and  is  practically  dependent  on  imported 
coal  or  imported  coke.  Little  or  no  coal  finds  its  way  from 
Nova  Scotia  to  Ontario  for  smelting  purposes.  Ontario  has 

1  See  Appendix  G,  and  Appendix  B,  Table  IV. 

^  The  amount  of  Newfoundland  and  of  American  ore  used :  — 

Calendar  year  From  Newfoundland  From  the  United  States 

(tons)  (tons) 

1910  685,117  681,918 

1911  779,282  849,086 

1912  956,469  1,052,696 

»  See  Appendix  B,  Table  IV. 


290    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

been  dependent  on  the  United  States,  This  scarcity  of  fuel 
which  the  Ontario  industry  had  to  face  in  early  years  has 
made  possible  the  carrying  of  coal  to  plants  which  are 
located  in  a  large  and  growing  market  area  in  Ontario. 
Coal  and  coke  can  be  brought  from  Pennsylvania,  Ohio, 
or  West  Virginia  to  Canadian  ports  on  the  Great  Lakes  al- 
most as  cheaply  as  to  American  ports.  For  this  reason  the 
Algoma  Steel  Corporation  purchased  coal  areas  in  West 
Virginia  in  1911.  The  admission  of  coking  coal  for  smelt- 
ing purposes,  subject  to  the  drawback  of  99  per  cent  of  the 
duty,  has  no  doubt  been  a  distinct  advantage,  especially 
to  the  Algoma  Steel  Corporation,  which  found  it  possible 
to  buUd  coke  ovens  at  its  steel  plant  at  Sault  Ste.  Marie. 
Coke  itself  has  been  on  the  free  list  for  the  benefit  of  all 
Canadian  manufacturing  industries. 

§  3.  It  is  a  common  feature  of  economic  development 
that  changed  technical  conditions  ^  of  an  industry  are  re- 
flected in  the  lagging  or  in  the  progress  made  by  the  indus- 
try of  a  particular  country.  England  long  held  supremacy 
in  the  iron  industry  because  of  unsurpassed  fuel  supplies. 
The  younger  industry  of  the  United  States,  handicapped 
by  a  later  start  and  widely  separated  natural  resources, 
won  the  ascendancy  by  a  concentrated  study  of  intensified 
production,  the  use  of  mechanical  applications  and  labor- 
saving  devices,  and  the  assistance  of  cheap  transportation. 

A  part  of  this  progress  has  been  due  to  changes  in  the 
methods  of  producing  iron  and  steel,  and  these  develop- 
ments are  favoring  the  growth  of  the  Canadian  as  well  as 
the  American  industry.  The  iron  first  produced  in  Canada, 
as  in  the  United  States,  was  charcoal  iron.  Even  at  the 
present  time  three  or  four  Canadian  furnaces  produce  a 
small  output  of  this  kind  of  iron.  In  1899  the  Canada  Iron 
Furnace  Company  planned  to  use  charcoal  as  fuel,  and  the 

^  See  J.  R.  Smith,  The  Story  of  Iron  and  Steel,  and  Chisholm,  Commer~ 
cial  Geography. 


THE  CAUSES  OF  RECENT  PROGRESS         291 

Algoma  Steel  Company  built  charcoal  furnaces  as  late  as 
1902,  but  both  of  these  companies  have  found  the  use  of 
coke  more  advantageous.  As  a  matter  of  fact,  the  iron  in- 
dustry is  past  this  stage  and,  except  under  conditions  where 
the  product  is  of  exceptional  quality  or  the  supply  of  char- 
coal unusually  good  and  cheap,  the  use  of  charcoal  is  really 
a  detriment  to  the  industry.  The  next  great  technical  de- 
velopment was  the  use  of  coke.  This  gave  supremacy  in 
iron-making  to  western  Pennsylvania,  and  Pittsburg  be- 
came the  capital  of  the  iron  world  in  what  might  be  called 
the  " Connellsville  Coke"  epoch.  More  recently  it  has 
been  found  possible  to  use  coal  of  poorer  quality  than  that 
found  in  the  Connellsville  district.  As  a  result,  the  area  of 
successful  blast  furnaces  of  the  most  modern  type  is  spread- 
ing, and  Nova  Scotia  measures  have  thus  been  included  in 
the  supply  of  coal  of  coking  quality,  much  to  the  advantage 
of  the  Canadian  iron  and  steel  industry. 

As  iron  ore  is  rarely  found  pure,  the  iron,  when  run  off 
and  moulded  into  pigs,  always  contains  too  high  a  propor- 
tion of  carbon,  and  sometimes  of  sulphur  and  phosphorus, 
which  are  injurious  to  its  quality.  It  is  because  of  excess 
of  carbon  that  cast  iron  is  converted  into  wrought  iron  or 
malleable  iron  through  eliminating  some  of  the  carbon  by 
a  process  called  puddling. 

By  1870  the  Bessemer  process  of  making  steel  had  been 
well  developed.  Steel  contains  less  carbon  than  cast  iron 
and  more  than  wrought  iron,  and  is,  therefore,  less  easily 
bent  than  wrought  iron,  and  less  easily  broken  than  cast 
iron.  Hence,  it  is  particularly  well  adapted  to  modern 
necessities,  and  between  1880  and  the  present  time  it  has 
practically  taken  the  place  of  bar  iron  in  the  finishing  in- 
dustries. 

By  the  Bessemer  process  the  molten  pig  iron  is  run  into 
a  large  pear-shaped  vessel,  a  converter,  through  which  air 
is  forced  until  the  carbon  is  all  consumed.  Then  the  com- 
pound of  iron,  containing  the  necessary  amount  of  carbon. 


292    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

is  added  and  mixed  by  blowing.  Ferro-manganese  is  added 
to  make  the  steel  less  brittle.  Unfortunately,  although  sul- 
phur can  be  eliminated  by  the  use  of  a  limestone  or  basic 
slag  and  a  very  high  temperature  in  the  smelting  of  the 
ores,  or  by  roasting  ores  before  they  are  charged  to  the 
blast  furnace,  phosphorus,  an  impurity  quite  common  in 
Canadian  ores,  cannot  be  controlled  by  the  smelting- 
master.  Yet  a  small  amount  of  it  is  practically  ruinous  to 
iron,  making  it  brittle.  For  a  long  time,  therefore,  many 
otherwise  good  ores  were  useless.  Newfoundland  ores  and 
the  Helen  Mine  ores  contain  a  considerable  amount  of 
phosphorus,  and  were  only  made  available  for  steel-making 
by  recent  inventions. 

The  first  invention  to  meet  this  diflficulty  was  made  in 
1878,  when  the  so-called  basic  Bessemer  process  was  de- 
vised.^ Many  American  ores  are,  however,  either  too  low 
or  too  high  in  phosphorus  to  be  classed  as  Bessemer  ores 
at  all.  Fortunately  for  Canada,  these  non-Bessemer  ores 
are  not  completely  useless.  In  1856  Messrs.  Siemens  took 
out  patents  for  the  open-hearth  process  of  steel-making, 
and  in  1864  improvements  were  made  by  a  Frenchman 
named  Martin.  This  Siemens-Martin  process  differs  from 
the  Bessemer  process  in  that  flames  play  over  the  molten 
metal  instead  of  being  blown  into  it.  As  the  fuel  supply  is 
entirely  independent  of  the  iron,  the  process  can  go  on  so 
long  as  is  necessary.  Meanwhile  it  is  under  perfect  control, 
and  samples  of  the  product  can  be  taken  and  examined,  and 
the  contents  of  the  furnace  changed  until  the  steel  is  satis- 
factory. The  process  takes  more  time,  and  is  more  costly, 
but  the  quality  of  the  product  is  more  uniform.  Because 
of  these  features,  combined  with  the  application  of  the  prin- 
ciple involved  in  the  basic  process,  the  basic  open-hearth 
furnaces  have  been  able  to  use  a  large  amount  of  otherwise 
worthless  ores.  Practically  all  Canadian  steel  furnaces  are 
of  the  basic  open-hearth  type.   The  Dominion  Steel  Cor- 

^  A  limestone  lining  is  used  to  extract  the  phosphorus  from  the  iron. 


THE  CAUSES  OF  RECENT  PROGRESS         293 

poration,  after  some  loss  on  expenditures  for  Bessemer 
furnaces,  installed  the  basic  furnaces,  which  were  more 
suitable  for  treating  the  iron  made  from  Newfoundland 
ores.  Likewise,  as  tlie  Helen  Mine  ores  were  of  a  kind  that 
required  the  basic  process,  the  Lake  Superior  Corporation 
installed  basic  furnaces  and  is  now  using  its  own  ores  from 
the  Helen  Mine,  the  output  of  which  it  shipped  previously 
to  the  United  States.  Nearly  all  other  Canadian  steel  fur- 
naces are  of  this  basic  open-hearth  type  for  which  New- 
foundland ore  and  Helen  Mine  ore  are  well  adapted.  This 
fact,  combined  with  the  relatively  high  price  of  open-hearth 
steel,  and  the  rapid  expansion  of  the  open-hearth  output, 
helps  to  explain  the  great  development  of  the  Canadian 
industry  and  speaks  well  for  its  future,  whether  or  not 
tariflF  or  bounty  protection  is  granted. 

§  4.  Before  considering  the  desirability  of  the  protective 
policy  from  the  point  of  view  of  the  consumer,  it  may  be 
wise  to  point  out  the  influence  of  the  Canadian  market  on 
the  development  of  the  industry.  That  the  market  has 
developed  need  scarcely  be  emphasized.  An  expansion  of 
railway  mileage  by  10,000  miles  in  sixteen  years  would  of 
itself  be  ample  evidence  of  increased  consumption.^  More 
definitely,  the  consumption  of  iron  and  steel  of  all  kinds 
increased  from  about  $40,000,000  annually  for  the  period 
from  1881  to  1896  to  about  $170,000,000  in  1910,  and  the 
prosperity  of  recent  years,  1910  to  1913,  has  raised  the 
annual  consumption  to  over  $250,000,000.^  In  other  words, 
the  consumption  increased  in  value  over  four  times  from 
1896  to  1910  and  over  six  times  by  1913.  The  consumption 
of  pig  iron  increased  from  about  110,000  tons  annually  for 
the  period  1891  to  1896  to  912,371  tons  in  1910  and  1,280,- 
176  in  1913.^  The  consumption  of  steel  ingots,  billets,  and 

^  See  Appendix  A. 

"^  See  Appendix  G,  Table  I,  and  Appendix  C,  Table  II. 

*  See  Appendix  B,  Table  I. 


294    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

bars  has  rapidly  increased  from  about  25,000  tons  annually 
for  the  period  1894  to  1900  to  over  200,000  tons  annually 
in  1902  and  1903,  and  to  nearly  1,000,000  tons  in  1912.^ 

The  value  of  this  home  market  to  the  Canadian  prod- 
ucts varies  from  time  to  time,  as  the  varying  amounts  of 
the  imports  show.  In  times  of  depression  the  market  is  less 
extensive,  and  there  is  more  danger  of  American  competi- 
tion and  a  decrease  in  prices.  For  instance,  the  wonderful 
revival  of  the  iron  trade  in  the  years  1897  to  1899  brought 
with  it  an  advance  in  price  ^  which  was  most  beneficial  to 
the  Canadian  industry.  Railways  that  had  been  econo- 
mizing for  a  few  years  began  to  make  large  expenditures 
and  the  United  States  steel  mills  had  not  the  capacity  to 
supply  the  demand.  It  was  during  this  period  that  the 
"Soo"  Mills,  the  Dominion  Iron  and  Steel  Company,  the 
Midland  Furnace,  the  Hamilton  Steel  Furnaces,  and  the 
Deseronto  Furnace  were  built.  The  years  1899  to  1902 
were  auspicious  years  for  the  development  of  an  iron  and 
steel  industry. 

Although  the  depression  of  1907  to  1908  somewhat  cur- 
tailed the  market,  the  Dominion  Iron  and  Steel  Company 
was  able  to  find  purchasers  abroad.  Rapid  railway  con- 
struction soon  revived  the  demand  and  the  Canadian  com- 
panies have  ordinarily  found  the  market  quite  favorable. 

§  5.  Probably  the  most  striking  sign  of  industrial  prog- 
ress in  recent  years  is  the  increasing  size  of  industrial  enter- 
prises, and  this  feature  is  of  considerable  significance  in  the 
recent  development  of  the  Canadian  iron  and  steel  indus- 
try. 

The  manufacture  of  iron  and  steel  requires  the  invest- 
ment of  a  very  large  amount  of  capital.  Most  modern  steel 
companies  own  and  operate  not  only  blast  furnaces,  but 
also  ore  deposits,  coal  measures,  coke  ovens,  steel-making 
furnaces,  and  finishing  mills  of  various  kinds.  The  com- 
1  See  Appendix  B,  Table  VI.  *  See  Appendix  H. 


THE  CAUSES  OF  RECENT  PROGRESS         295 

panics  that  produce  only  one  primary  product  are  of  little 
importance  in  Canada,  and  their  history  has  not  been 
marked  by  conspicuous  success.  Such  companies  as  the 
Dominion  Steel  Corporation,  the  Lake  Superior  Corpora- 
tion, the  Canada  Iron  Corporation,  and  the  Steel  Company 
of  Canada  own  and  operate  mines,  coke  ovens,  blast  fur- 
naces, and  steel  furnaces,  and  usually  manufacture  several 
lines  of  finished  articles. 

A  policy  of  industrial  integration  once  adopted  involves 
the  constant  problem  of  working  out  a  well-balanced  and 
coordinated  plant  through  the  adjustment  of  one  depart- 
ment to  another.  In  practically  no  case,  however,  is  a  back- 
ward move  made,  and  this  modern  principle  of  economic 
organization  becomes  a  dynamic  force  to  develop  and  ex- 
pand an  industry,  which  has  already  proved  a  success,  into 
a  most  efficient  establishment.  Just  here  a  few  Canadian 
illustrations  may  be  of  interest.  For  instance,  the  "Soo'* 
steel  and  rail  mills  were  closed  down  in  1902,  owing,  in  part, 
to  the  lack  of  a  supply  of  pig  iron,  and  the  company  found 
itself  forced  to  build  more  blast  furnaces  to  supply  pig  iron 
at  a  cost  lower  than  the  price  that  would  have  been  paid 
were  the  iron  purchased  in  the  open  market.  New  open- 
hearth  furnaces  and  coke  ovens  were  added  for  the  same 
reason.  In  more  recent  years  the  company  found  the  sup- 
ply of  iron  ore  sufficient  to  justify  an  addition  not  only  to 
the  primary,  but  also  to  the  finishing,  stages  of  manufac- 
ture. 

The  history  of  no  other  company  reveals  this  principle 
better  than  that  of  the  Nova  Scotia  Steel  and  Coal  Com- 
pany. The  production  of  finished  articles  has  always  been 
the  strong  feature  of  this  well-known  company,  and  its 
business  has  steadily  followed  that  increase  in  the  market 
which  we  have  already  considered.  This  has  necessitated 
the  continuation  of  a  policy  begun  as  early  as  1882.  At 
that  time  it  was  decided  to  build  a  steel  plant  to  supply 
steel  to  the  Nova  Scotia  Forge  Company.   More  recently 


296    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

the  building  of  the  Sydney  Mines  blast  furnace  in  1902  be- 
came absolutely  necessary,  if  the  more  advanced  lines  of 
business  were  to  be  continued.  The  supplies  of  pig  iron  and 
of  steel  have  made  possible  the  extension  of  the  business 
into  every  field  in  which  the  company  has  believed  it  could 
make  a  profit. 

The  prosperous  organization  of  the  business  of  the  Do- 
minion Iron  and  Steel  Company  has  called  for  continual 
readjustment  for  increased  business.  Some  pig  iron  was 
exported  for  a  year  or  two  until  the  finishing  mills  could  be 
put  in  satisfactory  running  order.  The  addition  of  a  rod 
mill,  even  before  the  bounties  on  rods  were  granted  is  a 
splendid  illustration  of  this  principle,  which  was  exempli- 
fied again  in  1911  and  1912  by  the  building  of  mills  to  use 
the  wire  rods  in  the  manufacture  of  finished  articles.  The 
constant  additions,  made  to  various  branches  of  the  plant 
from  time  to  time,  illustrate  this  growing  tendency  to  re- 
duce costs  to  meet  market  competitors  by  adding  to  the 
plant.  This  same  policy  has  been  followed  by  the  Hamil- 
ton Company  in  the  construction  of  steel  furnaces,  an  ad- 
ditional blast  furnace,  and  also  rod  mills  to  supply  the 
necessary  raw  materials  to  the  plants  now  controlled  by 
the  Steel  Company  of  Canada. 

This  is  no  theoretical  explanation.  The  Dominion  Steel 
Corporation  has  adopted  the  conscious  policy  of  reducing 
costs  by  extending  its  plant  in  order  to  place  itself  in  a 
position  to  stand  the  gradual  loss  of  bounties.  For  in- 
stance, Mr.  Plummer,  the  president,  said  in  his  1911  Re- 
port: "It  is  no  use  shirking  the  fact  that  it  will  hurt  us  in 
many  ways  to  have  our  rod  business  disorganized  (by  the 
passing  of  the  bounties),  but,  as  we  said  in  our  report,  we 
have  every  confidence  that  the  effect  will  be  overcome 
when  the  plant  is  completed.  By  this  we  mean  the  com- 
pletion of  the  wire  and  nail  mills  which  the  changed  con- 
ditions make  it  necessary  for  us  to  erect.  This  will  take 
time,  and  even  when  complete  they  will  not  for  some  time 


THE  CAUSES  OF  RECENT  PROGRESS    297 

give  full  employment  to  our  rod  mill,  but  we  have  no 
doubt  of  our  ability  to  finish  in  marketable  form  all  the 
material  we  can  turn  out."  ^  In  1912  the  results  of  the 
policy  were  being  realized.  This  same  principle  was 
avowedly  applied  in  the  development  of  the  blast  furnace 
and  steel  mills  in  preparation  for  the  loss  of  bounties  on  pig 
iron  and  steel  billets. ^  Strangely  enough,  the  loss  of  boun- 
ties appears  to  have  forced  the  corporation  to  see  the  value 
of  large-scale  production  and  integration  of  industry,  and 
in  this  way  actually  developed  the  industry. 

§  6.  Most  of  the  fundamental  conditions  of  the  recent 
development  of  the  Canadian  iron  and  steel  industry  have 
already  been  considered.  The  availability  of  resources,  the 
growth  of  the  market,  and  the  introduction  of  large-scale 
production  seem  of  especial  importance;  indeed,  the  direct 
connection  of  these  factors  with  the  progress  of  the  in- 
dustry is  obvious. 

A  number  of  other  conditions  have  been  favorable  to 
recent  developments.  Large-scale  production  has  been 
made  possible  by  the  availability  of  an  increasing  amount 
of  British  and  American,  as  well  as  Continental  and  Ca- 
nadian, capital.  Indeed,  the  great  danger  is  that  Canada 
may  have  been  over-borrowing.  However,  sound  indus- 
trial enterprises,  conservatively  financed,  should  not  fear 
the  future.  The  Nova  Scotia  Steel  and  Coal  Company  has 
always  been  favored  with  ready  financial  recognition.  The 
Dominion  Iron  and  Steel  Company  was  less  fortunate  for 
a  period  of  years,  but  it  is  undoubtedly  true  that  recent 
years  have  seen  a  return  of  financial  favor  due,  partly  to 
the  ending  of  the  previous  conflict  and  uncertainty  over 
the  coal  contracts,  and  partly  to  more  conservative  man- 
agement by  Canadian  financiers. 

Recently  there  has  been  a  tendency  to  emphasize  the 
importance  of  management  in  Canadian  industry.  Since 
1  Annual  Report,  1911,  pp.  8-9.  2  Ibid.,  1912,  p.  10. 


298    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

1903  the  management  of  the  Dominion  Iron  and  Steel 
Company  has  been  aggressive,  yet  efficient,  as  compared 
with  the  extravagant  and  almost  ignorant  operations  of 
the  first  manager.  Since  1910  there  has  been  a  further 
change  in  the  direction  of  a  more  efficient  organization  of 
the  whole  steel  corporation  business  under  Mr.  M.  J. 
Butler.  The  Nova  Scotia  Steel  Company  and  the  various 
establishments  carried  on  by  the  Drummonds  and  the 
McDougalls  have  always  been  models  of  good  manage- 
ment, and  there  is  no  doubt  that  the  industrial  operations 
of  the  Steel  Company  of  Canada  have  been  and  will  con- 
tinue to  be  properly  conducted.  The  Consolidated  Lake 
Superior  Company  failed  largely  because  Mr.  Clergue  had 
little  technical  knowledge,  and  because  his  unbounded  and 
somewhat  unbalanced  imagination  led  him  into  the  most 
extravagant  forms  of  finance.  Under  the  control  of  Mr. 
T.  J.  Drummond  and  his  assistants,  the  Lake  Superior 
Company  has  been  gradually  regaining  for  the  "Soo"  in- 
dustries the  respect  of  the  Canadian  public. 

The  labor  supply  in  Canada,  too,  has  become  more  satis- 
factory. The  Dominion  Iron  and  Steel  Company  brought 
men  from  England  until  the  work  could  be  taught  to  Ca- 
nadians. At  the  present  time  there  is  a  satisfactory  supply 
of  skilled  labor,  and  immigration  is  continually  supplying 
recruits  for  the  ranks  of  iron  and  steel  workers.  The  strikes 
at  the  coal  mines  in  Nova  Scotia  were  for  a  long  time  a 
source  of  trouble,  but  the  Dominion  Steel  Corporation  has 
apparently  secured  entire  control  of  this  situation  in  re- 
cent years. 

§  7.  Most  of  these  fundamental  conditions  were  as 
favorable  for  the  growth  of  the  Canadian  industry  as  for 
the  growth  of  the  industry  in  the  United  States,  so  the 
Canadian  industry  was  not  in  danger  of  severe  competi- 
tion. The  Cape  Breton  industry  was  especially  favored  by 
location  near  coal  fields  to  which  ores  can  be  cheaply 


THE  CAUSES  OF  RECENT  PROGRESS         299 

brought  by  water.  It  is  near  the  European  market;  it  can 
ship  by  rail  or  water  to  the  market  in  Quebec  and  Ontario 
or  the  Maritime  Provinces.  The  industry  on  the  mainland 
of  Nova  Scotia,  especially  at  Londonderry,  as  well  as  the 
primary  industry  at  Trenton  and  New  Glasgow,  has  not 
been  a  success  because  of  lack  of  ores.  The  Quebec  indus- 
try has  been  handicapped  by  the  lack  of  local  ore  and  coal. 
Most  Quebec  ores  contain  titanium,  which  makes  them 
hard  to  smelt;  as  yet  no  satisfactory  process  for  working 
such  ores  has  been  put  in  operation. 

The  Hamilton  Furnaces  are  situated  in  the  center  of  a 
large  and  growing  market  area.  Hamilton  is  favored  by 
adequate  transportation  facilities,  both  by  water  and  rail, 
and  ore  and  coal  can  be  laid  down  at  Hamilton  almost  as 
cheaply  as  at  other  Lake  ports.  The  industries  at  the 
"Soo,"  at  Midland,  and  Port  Arthur  are  more  favorably 
situated  for  the  supply  of  coal  than  the  recently  built  fur- 
naces at  Duluth,  and  they  can  secure  ore  at  a  cost  almost 
as  low  as  the  furnaces  at  Duluth,  and  certainly  at  a  lower 
cost  than  can  furnaces  at  Lake  Erie  ports  or  in  Ohio  or 
Pennsylvania. 

In  general,  labor  is  as  cheap  and  as  efficient  in  Canada 
as  in  the  United  States.  Capital  is  now  as  freely  offered; 
the  Canadian  market  is  expanding  very  rapidly;  technical 
developments  favor  the  Canadian  industry;  and  ore,  coal, 
and  coke  for  smelting  purposes  are  admitted  free  of  duty. 
Although  the  Canadian  market  is  much  smaller  than  the 
American  market,  and  the  scale  of  operations  is  smaller, 
Canadian  disadvantages  of  the  earlier  periods  have,  to  a 
very  considerable  extent,  disappeared.  Practically  all  the 
Canadian  furnaces  would  rank  among  the  number  of  fur- 
naces in  operation  in  America  in  a  time  of  ordinary  in- 
dustrial conditions,  even  if  protection  were  abolished. 

§  8.  On  a  'priori  grounds  there  is  room  for  assuming  that 
protection  has  assisted  the  Canadian  iron  and  steel  indus- 


300    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

try  by  maintaining  prices  and,  therefore,  augmenting  the 
Canadian  output  by  the  addition  of  a  few  small  plants.  If 
prices  are  kept  up  by  the  tariff,  or  if  higher  costs  of  produc- 
tion are  offset  by  bounties,  new  competitors  are  enabled  to 
enter  the  field,  or  inferior  and  antiquated  plants  may  be 
kept  running  at  a  profit.  It  is  more  difficult  to  prove  that 
the  determining  factor  in  the  building  of  iron  and  steel 
plants  has  been  either  the  bounties  or  the  tariff,  but  we  can 
recall  whatever  evidence  we  have  had  of  the  coincidence 
of  the  landmarks  of  progress  with  the  granting  of  duties  and 
bounties. 

In  the  first  place,  several  of  the  now  prominent  iron  and 
steel  industries  were  already  in  existence  in  1897.  The 
Nova  Scotia  Steel  Company,  the  Hamilton  Blast  Furnace 
Company,  the  Canada  Iron  Furnace  Company,  as  well  as 
many  smaller  establishments,  had  already  a  fairly  impor- 
tant business.  In  spite  of  the  decrease  of  protection  in 
1897,  these  continued  to  prosper  and  expand.  The  Nova 
Scotia  Steel  and  Coal  Company  built  furnaces  at  Sydney 
Mines  in  1902,  at  a  time  when  the  bounties  were  about  to 
decline.^  This  Cape  Breton  industry  would  have  grown  up 
whether  or  not  bounties  had  been  granted.  From  time  to 
time  furnaces  have  been  built  and  finishing  mills  added 
with  little  or  no  reference  to  changes  in  the  tariff.  Like- 
wise the  Canada  Iron  Furnace  Company  built  a  furnace 
at  Midland  in  1899,  before  the  renewal  of  bounties  was 
assured,  and  in  1909  another  furnace  was  added,  when  the 
bounties  were  about  to  disappear.  In  like  manner  the 
Hamilton  Company  continued  to  expand,  even  though  it 
found  itself  unable  to  use  as  much  Canadian  ore  as  it  had 
expected,  and  therefore  failed  to  obtain  the  higher  bounty. 
A  steel  plant  was  added  in  1900,  after  the  reduction  of 
duties  on  billets  had  been  but  partially  compensated  for  by 
an  increase  of  the  bounties  on  billets  from  $2  to  $3  per  ton, 
and  in  1906  an  additional  blast  furnace  was  decided  upon 

^  Mr.  Graham  Fraser's  letter  to  Mr.  W.  M.  Whitney,  re  bounties. 


THE  CAUSES  OF  RECENT  PROGRESS    301 

even  before  the  extension  of  the  bounty  system  was  as- 
sured. The  years  1911  and  1912  have  seen  the  addition  of 
rod  mills  after  the  disappearance  of  bounties  when  the  recent 
grant  of  tariff  duties  on  rods  was  by  no  means  assured. 

Since  the  reduction  of  protection  in  1897  much  progress 
has  been  made  by  entirely  new  firms  and  in  altogether  new 
centers.  Even  before  the  bounty  legislation  of  1899  was 
passed,  the  Dominion  Iron  and  Steel  Company  had  pur- 
chased iron-ore  deposits  and  had  located  the  site  of  the 
proposed  works  at  Sydney;  the  brickwork  of  the  blast  fur- 
nace was  finished  three  months  after  the  Bounty  Act  had 
been  passed.  There  is  evidence  that  building  operations 
were  actually  delayed  in  order  that  the  Government  might 
feel  more  responsibility  for  the  renewal  of  the  bounties. 
Thus  it  appears  that  the  bounties  in  that  respect  actually 
retarded  development.  Since  1902  blast  and  steel  furnaces, 
rolling  mills,  and  finishing  mills  have  been  added  from 
time  to  time.  Blast  furnaces  were  built  from  1910  to  1912, 
when  it  was  known  that  the  bounties  would  end;  a  rod  mill 
was  built,  even  before  bounties  were  paid  on  wire  rods;  the 
building  of  the  rail  mill  in  1904  depended  upon  the  possi- 
bility of  rounding  out  the  plant  rather  than  upon  the  tariff 
duty  imposed  in  1904.  Both  the  rod  and  rail  mills  were 
planned  long  before  protection  to  those  branches  of  the 
industry  had  been  assured.  Nail  and  wire  mills  were  built 
in  1911  to  consume  the  output  of  the  rod  mill.  The  com- 
pany hoped  by  thus  extending  the  scale  of  operations  to 
offset  the  loss  of  bounties  by  reducing  the  cost  per  unit  of 
product,  so  it  seems  that  the  reduction  of  protection  actu- 
ally forced  further  additions  to  the  plant.  It  was  an  avowed 
policy  of  the  Dominion  Iron  and  Steel  Company  to  expand 
the  plant  and  tlius  reduce  costs  in  order  to  meet  the  gradu- 
ally increasing  competition  as  the  bounty  payments  shaded 
off.  In  short,  the  growth  of  the  Dominion  Iron  and  Steel 
Company  is  a  story  most  adverse  to  the  merits  of  the  pro- 
tectionists' claims. 


302    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

The  Algoma  Steel  Company's  first  furnaces,  together 
with  a  rail  mill  and  a  structural  steel  mill,  were  built  in  1901 
to  1902.  The  rail  mill  was  first  put  in  operation  in  1902  on 
a  contract  for  rails  for  the  Dominion  Government,  but  not- 
withstanding the  extraordinary  price  paid  for  the  rails, 
the  whole  plant,  including  the  pulp,  paper,  steel,  and  chemi- 
cal mills,  the  mines,  the  railways,  and  the  power  plant,  was 
closed  down.  Duties  were  not  imposed  on  steel  rails  until 
1903.  After  a  much-needed  financial  reorganization,  the 
company  has  made  rapid  progress.  The  addition  of  coke 
blast  furnaces  and  open-hearth  steel  furnaces  since  that 
reorganization  has  been  due  to  industrial  causes  rather 
than  protection.  Since  1910  the  building  of  new  mills  and 
plants  has  been  regarded  as  a  necessary  move  to  meet  the 
effects  of  the  loss  of  bounties.  The  United  States  Steel 
Corporation  recently  decided  to  build  blast  furnaces,  steel 
furnaces,  rod,  rail,  and  finishing  mills  at  Sandwich,  On- 
tario, in  spite  of  the  fact  that  the  bounties  were  no  longer 
payable. 

Since  1897  a  few  small  establishments  have  been  put  in 
operation  for  various  reasons.  The  Deseronto  Furnace  was 
built  in  1898  because  the  United  States  Tariff  of  1897  had 
imposed  a  duty  on  charcoal,  and  a  new  market  for  charcoal 
made  at  that  place  seemed  necessary.  The  Port  Arthur 
Furnace  was  planned  as  early  as  1904,  when  it  seemed  that 
the  bounties  would  shortly  disappear.  The  construction 
work  was  done  in  1906  and  1907  before  the  renewal  of 
boimties  was  finally  decided  upon.  The  bounty  system 
failed  signally  to  stimulate  the  use  of  native  ores.  The 
revision  of  the  tariff  in  1914  may  put  an  end  to  an  arti- 
ficial delay  in  building  mills  for  the  production  of  heavier 
sections  of  structural  steel,  but  it  is  not  apt  to  lead  to  the 
building  of  additional  rod  mills  so  long  as  the  present  mills 
are  capable  of  supplying  the  Canadian  demand. 

There  seems  to  be  little  evidence  of  the  direct  construc- 
tive influence  of  protection  on  the  recent  growth  of  the 


THE  CAUSES  OF  RECENT  PROGRESS    303 

Canadian  iron  and  steel  industry.  One  might  argue  that 
the  protective  policy  was  applied  to  the  primary  industry 
under  especially  favorable  conditions,  and  was,  therefore, 
a  success,  even  though  the  actual  amount  of  protection  was 
being  gradually  reduced.  One  might  also  claim  that  higher 
protection  would  have  developed  a  still  larger  industry. 
Certainly,  such  conditions  as  the  supply  of  raw  materials 
and  the  size  of  the  market  were  much  more  favorable  than 
during  the  earlier  period. 

This  is  not,  however,  equivalent  to  saying  that  protec- 
tion alone  was  responsible  for  the  growth  of  the  industry; 
that  it  was  the  chief  favorable  factor;  that  the  industry 
would  not  have  developed  without  protection;  or  that 
higher  protection  would  have  resulted  in  the  growth  of  a 
much  greater  industry.  It  would  be  a  mistake,  however,  to 
say  that  protection  had  not  been  of  any  value  to  producers 
of  iron  and  steel  in  Canada,  or  that  it  had  not  stimulated 
to  some  extent  the  growth  of  the  industry.  A  great  num- 
ber of  influences,  some  of  them  interrelated,  affect  the  de- 
velopment of  an  industry.  Although  protectionists  have 
usually  assumed  that  protection  alone  should  receive  the 
credit  for  the  growth  of  the  industry,  there  is  Uttle  evidence 
in  favor  of  such  an  assumption.  It  may  have  actually 
handicapped  the  industry  at  times  by  encouraging  over- 
capitalization and  by  directing  attention  from  industrial 
to  poUtical  matters.  The  network  of  other  favorable  con- 
ditions would  have  permitted  the  growth  of  the  greater 
part  of  the  present  industry,  even  without  protection. 
Higher  protection  would  not  have  resulted  in  the  growth  of 
a  much  greater  industry  than  at  present  exists  in  Canada. 

Since  1900  about  eighty  per  cent  of  the  annual  consump- 
tion of  pig  iron  in  Canada  has  been  produced  within  the 
country.  Certain  special  grades  of  iron  could  not  have  been 
produced  in  Canada  except  under  the  protection  of  very 
high  duties.  If  we  add  to  this  amount  of  special  iron  that 
iron  which  has  entered  Canada  practically  free  of  duty,  for 


304    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

use  in  the  production  of  certain  goods,  we  can  see  that 
the  Canadian  industry  could  not  have  been  much  more 
prosperous  than  it  was.  Fourteen  of  the  largest  furnaces 
are  capable  of  producing  more  than  the  annual  consump- 
tion of  pig  iron  in  Canada,  even  if  the  demand  for  special 
qualities  of  pig  iron  is  transferred  to  the  ordinary  pro- 
duct. 

In  general,  the  total  consumption  of  steel  billets  has  been 
largely  supplied  by  the  Canadian  output,  which  amounted 
to  about  1,000,000  tons  in  1912  as  compared  with  imports 
of  about  90,000  tons.^  Even  if  the  Canadian  industry  had 
produced  the  additional  nine  per  cent  of  the  annual  con- 
sumption, it  would  not  have  been  much  more  important 
than  it  is  to-day.  In  all  probability,  as  ui  the  case  of  pig 
iron,  a  certain  part  of  this  nine  per  cent  could  not  have  been 
produced  in  Canada  even  under  high  protection,  since  there 
is  a  certain  demand  for  extraordinary  qualities  of  steel, 
especially  for  the  manufacture  of  tools. 

The  effect  of  protection  on  the  various  lines  of  the  finish- 
ing industry  is  more  difficult  to  determine.  While  the 
amount  of  iron  and  steel  consumed  increased  very  rapidly, 
the  Canadian  manufacturer  failed  to  produce  as  large  a  per- 
centage of  finished  products  as  of  primary  products.  In 
the  period  1891  to  1896,  nearly  two  thirds,  in  1900  slightly 
over  one  haK,  and  in  1910  nearly  two  thirds  of  the  annual 
consumption  was  produced  in  Canada.^ 

These  figures  are  not,  of  course,  so  significant  as  might 
at  first  appear.  Much  depends  on  the  conditions  of  the 
particular  branches  of  the  industry.  For  instance,  a  large 
part  of  the  steel-rail  industry  probably  would  have  been 
developed  without  protection,  since  Canadian  railroads 
are  glad  enough  to  carry  their  own  rails.  Protection  did 
not  have  a  very  direct  effect  on  the  introduction  of  the  in- 
dustry. About  ninety  per  cent  of  the  annual  consumption 

1  See  Appendix  B,  Table  VI. 

2  See  Appendix  C,  Table  II,  and  Appendix  G,  Table  II. 


THE  CAUSES  OF  RECENT  PROGRESS    305 

of  steel  rails  is  produced  in  Canada,  and  the  Canadian  mills 
are  capable  of  supplying  the  Canadian  demand  except  in 
extraordinary  years.  Certainly,  the  production  of  steel 
rails  would  not  have  been  much  more  successful  had  higher 
protection  been  given.  Although  protection  had  a  consider- 
able value  in  the  early  years  of  the  industry,  in  recent  years 
the  Canadian  mills  have  been  so  successful  that  protection 
might  have  been  reduced  without  injuring  their  business 
as  much  as  the  high  duty  has  hampered  the  building  and 
maintenance  of  railways  in  Canada. 

The  manufacture  of  steel  rods  was  proposed  and  begun 
before  bounties  were  offered,  and  in  1912  and  1913  the 
Steel  Company  of  Canada  added  rod  mills  when  the  boun- 
ties had  disappeared  and  duties  did  not  seem  to  be  forth- 
coming. The  Canadian  mills  are  capable  of  supplying  all 
the  Canadian  demand;  certainly,  they  are  assured  of  the 
larger  part  of  the  demand  for  wire  rods,  since  they  use  an 
increasing  amount  of  their  rods  in  their  own  finishing  mills. 
A  certain  part  of  the  demand  for  rods,  that  for  the  manu- 
facture of  certain  kinds  of  wire,  may  be  supplied  from  the 
United  States  unless  the  Canadian  mills  are  willing  to  let 
outsiders  have  wire  rods  at  a  price  as  low  as  the  expense  of 
supplying  rods  to  their  own  finishing  mills,  or  as  low  as 
other  firms  are  willing  to  accept  for  rods. 

The  lack  of  protection,  together  with  other  unfavorable 
conditions,  injured  several  industries,  such  as  the  tin- 
plate  industry.  The  abolition  of  protection  for  makers  of 
barbed  wire  has  apparently  ruined  their  business.  No 
doubt  discrepancies  in  the  wording  of  tariff  items  retarded 
the  production  of  certain  goods,  as,  for  instance,  structural 
steel  weighing  over  forty -five  pounds  per  lineal  yard.  On 
the  other  hand,  if  manufacturers  of  agricultural  imple- 
ments have  been  at  a  disadvantage  by  reason  of  the  reduc- 
tion of  protection,  it  has  not  been  apparent,  since  they  are 
well  known  in  the  markets  of  the  world  and  as  Canadian 
exports  exceed  Canadian  imports.    Yet  the  rapid  devel- 


306    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

opment  of  Canada  has  resulted  in  a  very  great  demand 
for  articles  which  are  grouped  as  manufactures  of  iron  and 
steel,  such  as  agricultural  implements,  cream  separators, 
cutlery,  threshing  machines,  gas  and  steam,  portable  and 
stationary  engines,  typewriters,  mining  machinery,  etc.; 
all  highly  finished  products.  In  fact,  about  half  of  Can- 
ada's imports  are  composed  of  such  articles.  In  times  of 
prosperity,  when  imports  of  iron  and  steel  are  apt  to  be 
large,  the  Canadian  mills  are  unable  to  keep  up  to  the 
Canadian  demand.  The  unusual  extent  of  railway  con- 
struction, building,  and  other  work  in  special  years  has 
frequently  resulted  in  an  extraordinary  importation  of 
certain  iron  and  steel  goods.  It  is  proverbial  that  a  good 
crop  in  western  Canada  leads  to  vast  purchases  of  agri- 
cultural implements. 

With  the  exception  of  those  producers  who  may  import 
iron  and  steel  subject  to  drawbacks  of  the  duty,  the  prices 
of  the  primary  products  —  that  is,  the  raw  materials  used 
by  the  manufacturers  of  finished  products  —  have  been 
higher  than  they  might  have  been.  Fortunately  the  dump- 
ing of  American  products  has  kept  the  price  of  pig  iron  and 
steel  lower  than  it  might  otherwise  have  been.  Neverthe- 
less, those  who  want  the  drawback  system  continued  and 
those  who  want  it  abolished  agree  that  the  duties  are  of 
some  value  to  the  producers  of  pig  iron  and  steel  and  a 
detriment  to  producers  of  finished  goods. 

In  considering  the  possible  effects  of  high  protection, 
we  ought  to  notice,  too,  that  a  great  part  of  the  demand 
for  iron  and  steel  goods  is  scattered  over  a  great  many 
items.  The  demand  for  special  finished  products,  such  as 
gas  engines,  is  apt  to  be  so  limited  in  Canada  that  one 
small  plant  might  supply  the  whole  demand.  The  manu- 
facture of  many  finished  products  is  also  affected  by  con- 
trol of  patent  rights,  and  consequently,  until  the  demand 
for  such  products  becomes  more  extensive,  production  is 
apt  to  be  carried  on  in  American  or  British  factories  and 


THE  CAUSES  OF  RECENT  PROGRESS         307 

mills.  The  sum  total  of  imports  of  all  such  highly  special- 
ized articles  may,  nevertheless,  be  very  great. 

While  we  have  not  enough  information  on  which  to  base 
a  detailed  estimate  of  the  efiPect  of  protection  on  many 
articles,  yet  we  can  say  that  some  industries  have  been 
handicapped  by  the  lack  of  protection,  some  have  been 
handicapped  by  the  duties  on  the  raw  materials,  pig  iron 
and  steel,  some  would  not  have  developed  even  had  higher 
protection  been  granted,  and  some  would  have  realized  a 
considerable  development  even  if  the  protective  pohcy  had 
favored  them  less  than  it  did. 

In  general,  one  may  conclude  that  the  primary  industry 
grew  up  largely  because  of  favorable  industrial  conditions, 
rather  than  because  of  protection,  and  certain  branches  of 
the  finishing  industry  did  not  grow  up  because  the  duties 
on  pig  iron  and  steel  increased  the  cost  of  production,  or 
because  protection  was  not  high  enough  for  this  stage  of 
Canadian  industrial  history.  In  short,  it  would  have  been 
desirable  to  reduce  or  abolish  the  duties  on  certain  primary 
products  and  to  avoid  protection  to  certain  finished  prod- 
ucts, and  at  the  same  time  it  would  have  been  advisable 
to  give  more  protection  to  the  producers  of  certain  finished 
products. 


CHAPTER  XII 

CONCLUSION 

§  1.  Canada  has  been  an  iron-producing  nation  since 
1730,  but  for  many  years  the  industry  was  very  small,  and 
most  of  the  furnaces  that  were  built  did  not  remain  in  blast 
for  a  long  period.  On  very  few  occasions  before  1879  were 
more  than  three  furnaces  in  blast  at  once.  At  the  end  of 
the  period  prior  to  the  adoption  of  the  "National  Policy" 
in  1879,  there  were  only  two  furnaces  in  blast  in  Canada, 
and  of  these  the  one  at  St.  Maurice  Forges  was  soon 
abandoned,  and  the  other  at  Londonderry  was  not  a  finan- 
cial success. 

Yet  one  should  not  expect  too  much  of  the  industry  in 
this  early  period.  Canadian  industry  in  general  was  lagging 
behind  that  of  the  United  States.  Climatic  conditions  were 
unfavorable;  there  was  an  insufficient  supply  of  labor  be- 
cause of  emigration  to  the  United  States  and  the  absence 
of  a  large  immigration  from  Europe;  transportation  facili- 
ties were  inadequate;  markets  were  limited,  and  there  was 
a  lack  of  capital  for  industrial  enterprise.  Where  general 
industrial  development  was  so  tardy  there  could  be  little 
demand  for  iron  and  steel.  Although  the  building  of  rail- 
ways in  the  sixties  and  seventies  increased  the  demand  and 
stimulated  the  building  of  mills  for  the  manufacture  of 
railway  supplies,  this  demand  was  never  large  enough  to 
require  anything  like  the  output  of  modern  industry. 
Moreover,  previous  to  1879  the  iron  industry  received  very 
little  protection,  and  British  and  American  iron-makers 
were  able  to  secure  a  large  part  of  the  existing  market. 
The  lack  of  large  bodies  of  ore  and  the  absence  of  good  sup- 
plies in  certain  sections  of  the  country  placed  such  industry 


CONCLUSION  309 

as  was  attempted  under  still  greater  disadvantages.  WTiat 
few  establishments  were  started  from  time  to  time  existed 
under  a  combination  of  especially  favorable  conditions,  and 
lasted  only  so  long  as  those  conditions  continued.  In  such 
circumstances  high  protection  would  have  been  a  mistake, 
indeed. 

Practically  the  same  general  conditions  of  growth  held 
for  the  next  period  from  1879  to  1897.  There  was  no  re- 
markable expansion  of  the  Canadian  industry  for  obvious 
reasons.  The  market  was  still  a  limited  one,  and  the  protec- 
tion afforded  the  iron  and  steel  industry  could  not  have 
stimulated  a  large  increase  in  production,  even  if  the  whole 
demand  had  been  supplied  by  Canadian  firms.  What 
growth  did  take  place  can  be  attributed  largely  to  a  certain 
expansion  of  the  market,  especially  that  which  followed  the 
railroad  building  of  1880  to  1884,  and  the  general  pros- 
perity of  the  period  from  1887  to  1894. 

During  this  period  the  duties  on  most  iron  and  steel 
goods  were  increased,  especially  in  the  year  1887,  but  they 
were  decreased  again  in  1894.  The  bounty  system  was 
introduced  in  1883  and  was  continued  and  extended  in 
later  years.  Protection,  which  probably  cost  the  consumers 
of  iron  more  than  the  price  of  a  plant  adequate  to  produce 
all  the  Government's  demand  for  iron  and  steel,  failed  to 
develop  an  important  industry.  Protection  of  the  finish- 
ing industry  did  develop  certain  branches;  in  fact,  the  out- 
put became  so  excessive  that  combinations  were  formed  to 
restrict  production  and  to  maintain  prices.  Duties  on  such 
products  might  have  been  reduced  more  than  they  were  in 
1894. 

The  most  rapid  growth  of  the  Canadian  iron  and  steel 
industry  has  occurred  since  1897;  a  period  of  gradually  re- 
duced protection.  Although  the  annual  consumption  of 
pig  iron  is  about  twelve  times  as  large  as  in  1896,  Cana- 
dian blast  furnaces  now  produce  an  average  of  over  80 
per  cent  of  this  demand,  as  compared  with  an  average  of 


310    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

about  30  per  cent  for  the  period  from  1884  to  1892,  and 
60  per  cent  for  the  years  1893  to  1900.  The  output  of  steel 
now  suppHes  about  90  to  95  per  cent  of  the  Canadian  de- 
mand, although  that  demand  has  mcreased  from  about 
20,000  tons  in  the  nineties  to  about  1,000,000  tons  to-day. 

This  remarkable  growi:h  has  been  caused  largely  by  the 
new  conditions  of  the  industry.  The  discovery  and  use  of 
Newfoundland  ores,  together  with  the  availability  of  Cape 
Breton  coal,  has  made  the  Nova  Scotia  industry  not  only 
possible  but  profitable.  The  discovery  of  the  Michipicoten 
ores  in  Ontario  stimulated  the  building  of  the  "Soo" 
Mills,  even  though  chief  use  has  been  made  of  American 
ores.  The  availability  of  capital  for  industrial,  as  well  as 
railway  enterprises,  the  increased  labor  supply,  and  efficient 
and  aggressive  management  were  additional  favorable 
conditions. 

The  years  1906  to  1914,  and  especially  1911  to  1914, 
have  been  a  period  of  organization  of  industry,  partly 
through  the  amalgamation  of  companies,  but  more  especi- 
ally through  the  rounding-out  of  the  plants  into  more 
efficient  establishments  producing  finished  as  well  as  pri- 
mary products.  In  this  regard  the  passing  of  the  bounty 
system  seems  to  have  been  of  more  importance  than  the 
original  granting  of  this  form  of  assistance.  That  a  large 
part  of  the  present  iron  and  steel  industry  would  have  been 
developed,  whether  or  not  protection  had  been  provided, 
has  been  quite  apparent.  The  fact  is  that  the  gradual  scal- 
ing down  and  final  disappearance  of  the  bounties  has  forced 
the  companies  to  put  their  enterprise  on  a  more  efficient 
basis.  One  may  fairly  question  whether  the  bounty  sys- 
tem has  not  even  postponed  the  adoption  of  modem  or- 
ganization of  the  iron  and  steel  industry.  At  all  events,  it 
is  quite  clear  that  recent  competition  from  without,  and, 
so  far  as  it  exists,  from  within,  the  country,  has  been  a 
dynamic  force  for  progress. 

In  recent  years  the  people  who  are  interested  in  the  pri- 


CONCLUSION  311 

mary  industry  have  been  urging  that  the  present  policy 
favors  producers  of  finished  products  without  developing 
the  primary  industry.  The  reverse  is  the  case.  While  from 
80  to  90  per  cent  of  the  Canadian  consumption  of  pig  iron 
and  steel  billets  is  made  in  Canada,  only  about  65  per  cent 
of  the  consumption  of  iron  and  steel  of  all  kinds  is  supplied 
by  Canadian  mills.  Probably  not  more  than  55  to  60  per 
cent  of  the  demand  for  finished  products  alone  is  satisfied 
by  the  output  of  Canadian  mills.  Undoubtedly  general 
industrial  groTvth  has  involved  a  large  demand  for  iron  and 
steel  products.  The  increase  of  railway  mileage  has  not 
only  ^vadened  the  market  area,  but  has  also  added  to  the 
direct  demand  for  finished  iron  and  steel  goods  iu  the  form 
of  railway  supplies.  The  growth  of  agriculture,  mining, 
and  manufacturing  has  created  an  extraordinary  demand 
for  machinery  of  all  kinds,  much  of  which  had  to  be  met  by 
importation.  The  lack  of  protection  was  partly  responsi- 
ble for  the  failure  to  develop  certain  branches  of  the  finish- 
ing industry,  while,  on  the  other  hand,  the  duties  on  the 
primary  products  were  a  burden  on  those  manufacturers 
who  did  manage  to  secure  a  hold  on  the  market.  Whether 
or  not  protection  was  responsible  for  the  growth  of  the 
finishing  industry,  or  whether  or  not  higher  protection 
would  have  developed  the  industry  more  fully,  depends 
on  the  particular  conditions  of  the  various  branches  of  the 
industry. 

§  2.  A  discussion  of  the  wisdom  of  the  protective  policy 
of  the  last  sixteen  years  includes  a  consideration  of  several 
things.  Some  of  these  we  have  already  discussed  and  the 
conclusions  need  only  be  summarized.  In  the  first  place, 
the  political  necessity  for  the  reduction  of  the  tariff  duties 
on  the  primary  raw  materials  was  supplemented  by  the 
fact  that  there  was  a  sound  economic  reason  for  such  a 
reduction  of  protection.  The  justification  for  this  state- 
ment need  scarcely  be  repeated.   It  is  enough  to  say  that 


312    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

cheapness  of  raw  materials  is  as  important  to  manufactur- 
ers of  the  more  highly  finished  products  as  are  protective 
duties  on  those  finished  products;  and  a  reduction  of  duties 
on  primary  products  makes  possible  a  reduction  of  the 
duties  on  finished  products. 

For  this  reason  the  bounty  system  was  preferable  to 
duties  on  pig  iron  and  steel  billets.  Whereas  duties  would 
have  kept  up  the  price  of  iron  and  steel,  bounties  gave  as- 
sistance without  increasing  the  price.  It  is  surprising  that 
the  duties  were  not  entirely  superseded  by  bounties.  To 
the  extent  that  the  bounties  were  unnecessary,  the  sys- 
tem represented  an  uncompensated  cost  to  the  Canadian 
Government  and  to  the  Canadian  people  in  general. 

Assuming,  then,  that  the  policy  of  having  cheap  raw 
materials  for  the  production  of  the  finished  products, 
adopted  by  Mr.  Fielding  in  1896,  and  accepted  by  Mr. 
White,  the  new  Finance  Minister  of  the  Conservative  Gov- 
ernment, was  politically  and  economically  sound,  the  Brit- 
ish preference,  so  far  as  it  reduced  the  amount  of  protec- 
tion granted,  was  a  step  in  the  same  direction.  Likewise, 
the  drawback  system  and  the  exemption  from  duty  of  iron 
and  steel  for  use  in  the  manufacture  of  iron  and  steel  goods 
reveal  this  same  interest  in  cheap  raw  materials,  and,  not- 
withstanding the  criticism  of  those  interested  in  the  pri- 
mary industries,  there  is  little  expectation  that  iron  and 
steel  of  a  kind  not  made  in  Canada  will  be  subjected  to 
duties  so  long  as  the  manufacturing  consumers  have  such 
a  large  economic  and  political  influence.  A  rebate  of  duties 
paid  has  been  given  certain  manufacturers  whose  products 
have  received  little  or  no  protection;  as,  for  instance,  agri- 
cultural implements,  and  certain  kinds  of  wire.  These 
favors  have  apparently  been  necessary  in  Canada,  since 
producers  of  agricultiu-al  implements  seem  to  bear  the 
burden  of  most  of  the  farmers'  criticism  of  high  protection. 
Drawbacks  of  the  duties  on  coal  and  coke  used  in  the  smelt- 
ing of  iron  have  favored  the  primary  industry  in  Ontario 


CONCLUSION  313 

without  injuring  the  coal  industry  of  Nova  Scotia.  The 
admission  of  iron  ore  free  of  duty  was  a  similar  desirable 
benefit  to  the  primary  iron  and  steel  industry  in  Canada. 
The  dumping  clause  was  a  violation  of  this  principle. 
Had  it  succeeded  in  relieving  a  special  disadvantage  of  the 
Canadian  industry,  it  would  have  resulted  in  such  an  in- 
crease of  the  cost  of  producing  finished  products  in  Canada 
as  might  have  ruined  the  finishing  industry.  The  large 
producers  of  pig  iron  and  steel  billets  turn  a  great  part  of 
the  product  into  finished  goods  at  their  own  mills.  Al- 
though the  duties  on  such  raw  products  are  no  disadvan- 
tage to  these  finishing  mills,  they  may  be  a  serious  disad- 
vantage to  the  firms  which  produce  finished  products  alone. 
This  has  been  illustrated  already  by  reference  to  the  duties 
recently  imposed  on  wire  rods,  and  to  the  way  in  which 
duties  on  pig  iron  and  steel  billets  may  have  retarded  the 
production  of  finished  products  by  independent  firms. 
Accordingly,  industrial  combination  and  integration  of 
industry,  especially  in  recent  years,  make  the  case  even 
stronger  against  the  duties  that  have  been  maintained  or 
imposed  on  pig  iron,  steel  billets,  and  such  other  primary 
or  intermediate  products  as  wire  rods. 

§  3.  What,  then,  should  the  future  policy  be?  Mr. 
White,  the  Finance  Minister,  has  recently  declared  him- 
self opposed  to  high  protection  for  the  primary  products, 
since  he  believes  that  they  should  be  available  at  as  low 
a  price  as  possible.  A  minor  revision  was  undertaken  dur- 
ing the  last  session  of  Parliament  (1914)  and  certain  duties 
were  increased.  Consequently  the  iron  and  steel  interests 
are  expectantly  awaiting  the  tariff  revision  which  is  likely 
to  follow  the  next  general  election. 

In  the  first  place,  the  dumping  clause  ought  to  be  abol- 
ished. If  it  could  be  proved  that  foreign  competition  were 
entirely  shut  out  bj''  the  dumping  clause,  and  that  the 
Canadian  prices  are  the  trust  price  plus  the  duties  and 


314    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

transportation  charges,  no  politician,  and  certainly  no  fair- 
minded  Canadian,  would  favor  the  retention  of  the  dump- 
ing clause.  So  far  as  the  clause  is  violated  it  is  useless. 
Meanwhile  its  application  has  given  rise  to  endless  con- 
fusion and  uncertainty,  not  only  in  respect  to  facts,  but 
principles.  If  protection  is  needed,  it  should  be  given  in  a 
definite  form,  and  not  according  to  a  makeshift  policy  that 
is  no  protection,  because  its  application  is  never  determin- 
able. The  sooner  the  dumping  clause  is  removed  from  the 
statute  books  the  better. 

Secondly,  so  much  depends  on  the  availability  of  cheap 
raw  materials,  and  so  considerable  a  part  of  the  Cana- 
dian industry  is  built  on  the  use  of  foreign  ore,  that  a  duty 
on  the  importation  of  raw  materials,  iron  ore  and  coal,  for 
the  purpose  of  encouraging  the  use  of  Canadian  resources, 
should  not  be  imposed.  Fvirther,  the  admission  of  New- 
foundland ore  free  of  duty  has  the  special  merit  of  being  a 
concession  to  a  sister  colony.  The  claim  that  the  Canadian 
iron  and  steel  industry  should  have  more  protection,  on 
the  ground  that  Canadian  resources  should  be  protected  in 
order  to  be  developed,  and  that  such  duties  on  raw  ma- 
terials would  necessitate  an  increase  in  favor  of  subsequent 
stages  of  manufacture,  is  a  proposition  that  cannot  find 
favor  with  either  the  iron  and  steel  industry  or  the  public. 
Besides,  a  scheme  of  this  kind  would  be  a  violation  of  those 
principles  of  conservation  which  have  but  recently  secured 
such  merited  recognition  in  Canadian  public  opinion. 

Thirdly,  the  duties  on  scrap  iron,  pig  iron,  steel  billets, 
bar  iron  and  steel,  wire  rods,  and  all  other  primary  and 
intermediate  iron  and  steel  products,  should  be  reduced. 
These  goods  should  be  admitted  free  of  duty  under  the 
British  preference.  A  small  duty,  equivalent  to  about  2| 
and  5  per  cent  ad  valorem,  imposed  under  the  intermediate 
and  general  tariffs,  would  probably  protect  against  the 
dumping  of  American  products,  without  prohibiting  ab- 
solutely the  American  producers  from  selling  to  Canadian 


CONCLUSION  315 

firms  "duty  paid,"  or  without  increasing  the  cost  of  the 
raw  materials  of  the  independent  producers  of  finished 
goods  beyond  the  cost  to  those  producers  who  use  these 
primary  products  in  their  own  finishing  mills. 

This  reduction  of  protection  would  force  Canadian  pro- 
ducers of  pig  iron  and  steel  billets  to  extend  their  plants  and 
to  increase  the  scale  of  operations  in  order  to  reduce  costs, 
just  as  the  passing  of  the  bounties  led  to  the  erection  of  nail 
mills  at  Sydney.  There  is  little  reason  to  suppose  that  an 
organization,  as  efficient  as  Mr.  Plummer  has  recently  de- 
clared the  Sydney  establishment  to  be,  would  not  be  able 
to  improve  its  plant  and  expand  its  business  to  meet  the 
importation  of  free  pig  iron  and  steel  billets. 

The  reduction  of  protection  on  the  raw  materials  would 
favor  the  finishing  industry  which,  as  a  whole,  is  far  more 
important  to-day  than  the  primary  industry.  Independ- 
ent producers  of  finished  products  who  have  to  buy  their 
raw  materials  would  have  an  opportunity  to  produce 
under  conditions  almost  as  favorable  as  those  who  produce 
their  own  raw  materials  which  they  turn  into  finished  prod- 
ucts. Consequently,  the  smaller  firms  now  in  existence 
would  have  a  chance  to  develop  their  business  and  some 
new  plants  would  be  built.  At  all  events,  the  tariff  on  pri- 
mary products  would  no  longer  encourage  the  integration 
of  industry,  and  what  integration  would  take  place  would 
be  based  upon  natural  industrial  forces,  rather  than  arti- 
ficial conditions. 

So  far  as  this  study  shows,  protection  has  been  most 
successful  in  developing  the  finishing  industry.  If  it  were 
increased,  it  would  not  be  able  to  develop  all  branches  of 
the  industry,  and  it  would  be  too  costly  in  certain  fields. 
In  general,  at  the  present  time  the  protection  to  finished 
products  might  be  reduced  if  the  duties  on  the  raw  mate- 
rials were  reduced.  In  special  branches  of  the  industry  pro- 
tection might  be  practically  abolished.  The  duties  on  steel 
rails  might  well  be  reduced  to  nothing  under  the  British 


316    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

preference,  and  to  about  five  per  cent  under  the  general  and 
intermediate  tariffs.  Plants  that  can  sell  at  a  profit  in 
India,  Great  Britain,  Mexico,  etc.,  even  in  years  of  depres- 
sion, scarcely  need  protection.  Possibly  Canadian  rail- 
roads would  then  be  able  to  complete  their  systems  without 
making  annual  pilgrimages  to  Ottawa  for  subsidies  that 
run  into  the  millions.  The  same  policy  might  also  be  fol- 
lowed in  the  small  hardware  lines,  and  in  such  other 
branches  of  the  industry  as  a  tariff  commission  or  com- 
mittee might  determine.  Other  portions  of  the  industry 
might  be  granted  higher  net  protection  for  a  few  years  of 
experimentation  or  until  Canadian  firms  could  get  a  grip 
on  the  market.  If  a  committee  undertook  this  work  care- 
fully, and  if  the  duties  were  reduced  when  the  industry  had 
received  the  necessary  stimulus,  the  consumers  of  finished 
products  might  benefit  in  the  long  run,  producers  of  fin- 
ished products  certainly  would  gain  at  once,  and  producers 
of  the  primary  and  intermediate  products  would  soon  find 
that  they  could  use  an  increasing  amount  of  their  raw 
materials  in  their  own  finishing  mills,  and  could  supply 
the  increasing  demand  for  such  primary  and  intermediate 
products. 

A  recent  development  in  steel-making  has  been  favoring 
a  new  Canadian  industry.  Just  as  the  extraordinary 
quality  of  the  Quebec  charcoal  iron  has  been  of  the  great- 
est importance  in  the  success  of  those  small  Quebec  fur- 
naces, so  the  production  of  special  kinds  of  steel  for  the 
manufacture  of  tools,  steel  rails,  and  high-speed  steels  may 
become  an  important  basis  for  progress  of  the  Canadian 
industry.  Dr.  Herault,  director  of  the  Electro  Metallurgi- 
cal Works  at  La  Praz,  France,  said  that  by  1915  Canada 
would  be  a  great  metallurgical  country  and  that  in  time 
she  will  supply  the  world.  This  is  probably  the  over-en- 
thusiastic statement  of  a  technical  metallurgist,  for  under 
conditions  which  obtain  in  most  of  the  settled  regions  of 
the  world,  neither  pig  iron  nor  ordinary  steel  can  be  pro- 


CONCLUSION  317 

duced  in  the  electric  furnace  at  a  cost  to  compete  with  the 
ordinary  furnaces.  Under  exceptional  conditions,  where 
cheap  electric  power  can  be  obtained  in  the  immediate 
vicinity  of  the  ore,  or  where  some  special  quality  of  pro- 
duct is  desired,  pig  iron  or  steel  can  be  produced  profitably 
by  electric  furnaces.  In  due  time,  when  fuel  supplies  be- 
come much  scarcer  than  at  present,  electric  smelting  may 
have  a  considerable  influence  on  the  general  development 
of  iron  and  steel  industries.^  Meanwhile  there  is  some  rea- 
son why  Canada,  with  extraordinary  electric  power,  such 
as  is  obtainable  at  Sault  Ste.  Marie  and  many  other  places 
in  Ontario  and  Quebec,  should  continue  to  expand  this 
specialized  branch  of  the  iron  and  steel  industry  which  she 
has  already  begun.  When  electric  steel-making  on  a  large 
scale  becomes  economically  possible,  the  future  of  the  iron 
and  steel  industry  in  Canada  will  be  fully  assured,  by 
reason  of  Canada's  unsurpassed  water  power  and  her  re- 
serves of  iron  ore  of  unknown  extent  and  quality. 

§  4.  It  might  be  said  that  if  pig  iron  and  steel  billets,  as 
well  as  other  goods,  are  to  be  practically  free,  it  would  be 
wise  to  renew  the  bounty  system.  This  is  impossible.  The 
bounty  system  was  introduced  because  it  would  give  protec- 
tion without  increasing  the  price  of  the  products.  Duties 
would  have  cost  those  who  used  pig  iron  a  part  of  the  duty 
on  all  pig  iron  and  steel  billets  consumed.  Bounties  cost 
the  Government  a  definite  amount  only  on  that  part  of  the 
annual  consumption  which  was  supplied  by  home  pro- 
ducers. But  to-day  80  to  95  per  cent  of  the  total  consump- 
tion is  produced  in  Canada,  and  if  the  rate  of  bounty  were 
large  enough  to  give  real  assistance,  the  bounty  payments 
would  be  very  burdensome  to  the  Government. 

This  temporary  merit  of  the  bounty  system  suggests, 
then,  the  very  reason  why  a  bounty  system  is  no  longer 
expedient  or  desirable  in  Canada.  Politically,  it  is  unde- 
^  United  States  Geological  Survey,  Report,  1906,  pp.  100-01. 


318    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

sirable  because  there  is  a  grovring  political  influence  in 
western  Canada  opposed  to  protection,  and  because  the 
iron  and  steel  interests  themselves  are  none  too  favorable 
to  the  bounty  system.  The  Liberals  provided  for  ending 
bounty  payments  in  1910  to  1912,  and  the  Conservative 
Government,  though  avowedly  protective  in  its  policy, 
has  not  seen  fit  to  renew  these  favors  to  the  iron  and  steel 
industry. 

This  political  objection  to  the  bounty  system  is  merely 
the  expression  of  more  fundamental  economic  conditions. 
Mr.  Fieldiug  claimed  that  the  bounties  had  been  entirely 
repaid  by  the  increase  in  customs  collections.  But,  un- 
fortunately for  the  bounty  system,  these  collections  have 
been  made  on  imports  of  an  entirely  different  character, 
purchased  by  other  manufacturiag  interests,  by  the  min- 
eral, farming,  and  lumbering  industries,  and  by  the  general 
consuming  public,  including  the  laboring  class  itseK.  In 
other  words,  the  prosperity  of  the  Canadian  iron  and  steel 
industry,  so  far  as  it  has  depended  on  bounties,  has  been 
an  actual  burden  on  other  industries  which  received  little 
or  no  benefit  from  the  development  of  the  iron  and  steel 
industry.  If  it  can  be  shown  that  the  protective  system 
itself  has  been  superfluous,  this  count  against  the  bounties 
is  conclusively  proved. 

This  criticism  of  the  Canadian  bounty  system  does  not 
apply  with  so  great  force  to  the  earlier  period  of  develop- 
ment when,  as  has  been  said,  a  much  smaller  amount  of 
bounties  was  paid.  But  according  to  the  foregoing  rea- 
soning, the  large  payments  of  boimties  in  recent  years  have 
been  an  injustice  of  considerable  importance  to  a  part  of 
the  community  which  derived  little  or  no  direct  benefit 
from  the  development  of  the  industry.  The  payment  of 
bounties  on  every  variety  of  iron  and  steel  production  is  an 
obvious  impossibility  which  the  revisers  of  the  tariff  clearly 
recognized  in  1907  by  the  abolition  of  the  boimties  on  the 
production  of  angles,  tees,  shapes,  etc.  Not  only  the  variety 


CONCLUSION  319 

but  also  the  volume  of  such  production  entirely  prohibits 
such  an  application  of  the  system.  The  actual  cost  in 
bounty  payments  would  be  altogether  too  large  and  the 
injustice  to  that  part  of  the  public  that  paid  revenue  duties 
on  other  goods  would  be  obvious.  That  the  iron  and  steel 
industry  only  should  benefit  is  something  which  no  fair- 
minded  statesman  or  economist  could  support. 

§  5.  Unfortunately  the  application  of  a  protective  policy 
is  seldom  determined  on  ultimate  economic  grounds.  Un- 
due recognition  has  been  given  to  political  interests.  Ca- 
nadian experience  shows  that  the  protective  policy,  as  it 
usually  works  out,  is  a  question  of  expediency  rather  than 
of  principle.  Fortunately  enough,  it  has  been  not  only 
economically  but  also  politically  expedient  for  the  Cana- 
dian Government  to  reduce  the  total  amount  of  protec- 
tion granted  the  iron  and  steel  industry  in  recent  years. 
The  fact  that  the  operations  of  a  protective  policy  bear  the 
marks  of  expediency  appears  also  in  the  illogical  and  in- 
consistent way  in  which  it  has  been  applied. 

Of  recent  years  there  has  been  some  leaning  toward  a 
theoretical  justification  for  the  doctrine  of  protection, 
through  the  quite  general  adoption  of  the  infant  industry 
argument,  or  the  dynamic  theory  of  protection.  American 
political  parties  were  for  a  brief  moment  agreed  on  the 
adoption  of  a  so-called  "cost  of  production"  basis  of  pro- 
tection. Protection,  however,  is  frequently  granted  to 
industries  where  the  infant  industry  argument  does  not 
apply  because  the  conditions  for  development  do  not  exist, 
or  because  the  burden  of  protection  is  too  great.  It  has 
been  common  for  the  Canadian  Government  to  grant  pro- 
tection because  articles  were  already  made  in  the  country 
in  considerable  quantities,  or  because  there  was  evidence 
that  mills  would  shortly  be  in  operation.  The  general 
tendency  is  for  the  Government  to  accept  uncritically  the 
application  of  the  infant  industry  argument  to  practically 


320    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

every  industry  that  has  sufficient  political  dominance  to 
claim  support.  The  industry  that  would  have  protection 
should  prove,  first,  that  conditions  are  ripe  for  the  appli- 
cation of  that  policy;  second,  that  the  general  welfare  of 
the  country  would  be  advanced  in  this  way;  and  third, 
that  the  industry  could  not  make  satisfactory  headway 
without  protection,  or  that  the  favorable  conditions  would 
not  themselves  develop  a  satisfactory  industry. 

Along  with  the  acceptance  of  the  infant  industry  argu- 
ment has  gone  a  demand  for  the  reduction  of  protection  as 
the  ability  of  an  industry  to  compete  was  increased.  The 
principle  has  appeared  in  the  scheme  of  gradually  reducing 
the  bounties  as  the  industry  became  solidly  established. 
This  feature  of  the  bounty  system  was  most  creditable, 
because  in  the  stages  of  its  application  the  large  payments 
required  made  it  impossible  to  renew  the  system.  Thus  the 
application  of  protection  to  the  Canadian  iron  and  steel 
industry  has  merited  less  criticism  than  its  application  to 
many  other  industries  or  in  many  other  countries. 

The  unqualified  "cost  of  production"  theory  of  protec- 
tion has  never  been  accepted  in  Canada.  For  this  reason 
anthracite  coal  and  coke  are  admitted  into  Canada  free  of 
duty  and  bituminous  coal  used  for  smelting  purposes  is 
admitted  subject  to  a  drawback  of  99  per  cent  of  the  duty 
paid. 

There  is  a  danger  that  protection  as  a  permanent  policy 
may  be  adopted.  Recently  the  iron  and  steel  people  have 
urged  that  protection  should  be  increased.  This  claim  is 
based  on  an  alleged  understanding  that  when  the  bounties 
disappeared  compensatory  protection  in  the  form  of  duties 
would  be  given.  The  political  change  which  put  the  tradi- 
tionally protectionist  party,  the  Conservatives,  in  power, 
has  given  the  manufacturers  the  courage  to  ask  for  pro- 
tection, whereas  under  the  Liberal  regime  they  were  con- 
tent to  let  the  bounties  pass  away  and  to  make  the  best  of 
it  by  introducing  internal  economies. 


CONCLUSION  321 

Some  have  thought,  too,  that  protection  was  granted  to 
all  interests.  As  a  matter  of  fact,  protection  universally 
applied  to  all  articles  and  stages  of  manufacture  produces 
a  situation  in  which  the  profits  of  one  stage  eat  up  the  pro- 
fits of  the  next.  If  the  producers  of  iron  ore  secure  protec- 
tion in  their  favor,  the  blast  furnace  people  must  be  given 
favorable  duties  to  offset  the  increase  in  cost  of  production 
of  pig  iron.  Likewise,  the  duties  on  pig  iron  eat  up  the 
special  profits  that  accrue  to  steel-making  by  reason  of  the 
duties  on  steel  billets;  and  so  on  down  the  list.  The  high 
prices  obtained  for  protected  articles  are  offset  by  the  high 
cost  of  raw  materials  and  by  the  high  price  of  articles  pur- 
chased for  ultimate  consumption.  In  other  words,  a  con- 
sistent application  of  protective  duties  to  all  industries,  by 
which  one  industry  is  as  much  favored  as  another,  is  of 
little  value,  because  protection  to  one  stage  of  the  industry 
neutralizes  that  given  to  the  next  stage  in  the  same  indus- 
try, to  say  nothing  of  its  effect  on  other  industries. 

Hence  it  is  that  the  only  method  of  making  protection 
effective  is  to  grant  it  to  some  stages  of  an  industry,  or  to 
certain  industries,  or  to  permit  certain  industries  to  form 
monopolies  while  others  find  it  impossible  effectively  to 
combine.  In  short,  not  all  the  country  can  benefit  from 
protection,  and  what  is  the  profit  of  one  industry  becomes 
the  burden  of  another.  Meanwhile  this  illogical  applica- 
tion of  protection  gives  rise  to  endless  discussions  of  in- 
justice, and  the  balancing  of  political  influence,  supported 
by  already  developed  industries,  decides  what  the  com- 
mercial policy  shall  be,  although  it  is  the  economic  condi- 
tions that  determine  in  a  large  measure  the  course  of  in- 
dustrial development. 

§  6.  This  leads  us  again  to  the  old  and  well-known  prin- 
ciple of  the  plurality  of  causes.  This  study  is  a  protest 
against  the  common  error  of  regarding  events  as  the  out- 
come of  a  single  factor.  Just  as  an  industry  is  complex,  so 


322    THE  CANADIAN  IRON  AND  STEEL  INDUSTRY 

too  the  causes  operating  in  favor  of  or  against  the  indus- 
try are  many  and  diverse.  Some  changes  are  adverse  and 
some  give  assistance;  some  prohibit  development  and 
some  make  an  expansion  of  industry  possible.  But  if  the 
effect  of  protection  cannot  be  precisely  determined,  it  is 
hoped  that  this  study  has  at  least  made  it  apparent  that  a 
great  number  of  causes  have  been  at  work,  and  it  is  sug- 
gested that  the  broader  understanding  of  the  forces  under- 
lying economic  development  in  many  spheres  would  give 
a  basis  for  more  informed,  and,  therefore,  much  wiser  and 
more  applicable,  legislation. 

Finally,  it  should  be  noted  that  these  causes  for  economic 
movements  are  a  network  of  influences  interwoven  in  dif- 
ferent directions  and  in  different  ways.  General  Canadian 
industrial  development  has  built  up  an  increasing  market 
for  iron  and  steel.  It  has  called  for  the  building  of  railways 
which  has  always  resulted  in  an  increase  in  the  Canadian 
iron  and  steel  industry.  It  has  resulted  in  the  discovery  of 
ores  of  considerable  importance,  and  it  has  found  the  labor 
supply  and  the  capital  necessary  for  large  industrial  un- 
dertakings. These  minor  phases  of  Canadian  develop- 
ment are  themselves  interrelated.  The  whole  process  of 
Canadian  economic  organization  goes  far  to  explain  the 
recent  development  of  the  iron  and  steel  industry.  Mean- 
while the  fact  that  the  industry  is  so  intimately  con- 
nected with  every  phase  of  Canadian  economic  life  sug- 
gests the  conditions  of  success,  and  demands  that  a  wise 
commercial  policy  in  respect  to  iron  and  steel  shall  not 
retard  any  phase  of  that  Canadian  future  which  seems  so 
promising. 


THE   END 


APPENDIX 


THE  STATISTICAL   PROGRESS  OF  CANADA  ^ 


Year  ending 
June  30 


1851 
1861 
1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1883 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 
1896 
1897 
1898 
1899 
1900 
1901 
1902 
1903 
1904 
1905 
1906 
1907 
1908 
1909 
1910 
1911 
1912 
1913 
1914 


Estimated 

population 

July  1  2 


2,384,409 
3,171,518 


3,689,257 


4,324,810 


4,833,239 


6,371,315 


7,204,838 


Railway  mileage     1 

In  oper- 

Yearly 

ation 

mcrease 

159 



2,146 

— 

2,270 

— 

2,524 

246 

2,617 

93 

2,695 

78 

2,899 

204 

3,832 

933 

4,331 

499 

4,804 

473 

6,218 

414 

6,782 

664 

6,226 

444 

6,858 

632 

7,194 

336 

7,331 

137 

8,697 

1,366 

9,577 

880 

10,273 

696 

10,773 

500 

11,793 

1,020 

12,184 

391 

12,585 

401 

12,585 

— 

13,151 

666 

13,838 

687 

14,564 

726 

15,005 

441 

15,627 

622 

15,977 

350 

16,270 

243 

16,550 

280 

16,870 

320 

17,250 

380 

17,657 

407 

18,140 

483 

18,714 

574 

18,988 

274 

19,431 

443 

20,487 

1,056 

21,353 

866 

22,452 

1,099 

22,966 

514 

24,104 

1,138 

24,731 

627 

25,400 

669 

26,727 

1,327 

29,304 

2,677 

— 

— 

Gross 

liabilities  of 

commercial 

failures 


$6,454,525 

12,334,192 

7,696,765 

28,843,967 

25,517,991 

25,523,903 

23,908,677 

29,347,937 

7,988,077 

5,751,207 

8,587,657 

16,311,742 

15,994,361 

19,191,306 

8,861,609 

10,386,884 

14,081,169 

14,713,225 

18,289,935 

17,100,649 

13,766,191 

12,689,794 

17,616,215 

15,802,989 

17,169,683 

14,157,498 

9,821,323 

10,658,675 

11,613,208 

10,811,671 

10,934,777 

7,552,724 

11,394,117 

9,854,659 

9,085,773 

13,221,259 

14,931,790 

12,982,800 

14,514,650 

13,491,196 

12,316,937 

16,979,406 


Imports  and 
exports,  total 


8  131,027,532 
130,889,946 
148,387,829 
170,266,589 
194,070,190 
217,801,203 
217,565,510 
200,957,262 
174,176,781 
175,203,355 
172,405,454 
153,455,682 
174,401,205 
203,621,663 
221,556,703 
230,339,826 
207,803,539 
198,179,847 
189,675,875 
202,408,047 
201,097,630 
204,414,098 
218,607,390 
218,384,934 
241,369,443 
247,638,620 
240,999,889 
224,420,485 
239,025,360 
257,168,862 
304,475,738 
321,661,213 
381,517,238 
386,903,157 
423,910,444 
467,064,685 
472,733,038 
470,151,289 
550,872,645 
465,063,204 
650,793,131 
571,268,767 
693,211,221 
769,443,905 
874,637,794 
1,085,264,449 
1,129,744,725' 


*  Compiled  from  the  Report  of  the  Department  of  Trade  and  Commerce,  1913,  part  4. 
'  W.  J.  Donald,  "The  Growth  and  Distribution  of  Canadian  Population,"  Journal  of 
Political  Economy,  vol.  xxi,  p.  306. 
»  Canada  Year  Book,  1913,  p.  227. 


326 


APPENDIX 


B 

THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 


Table  I 

Pig  iron  produced  in  Canada,  upon  which  bounty  has  been  paid  by 
the  Federal  Government ;  pig  iron,  kentledge,  and  scrap  iron  for 
home  consumption  imported  into  Canada;^  the  total  consump- 
tion of  pig  iron  in  Canada,  and  the  percentage  of  Canadian  pro- 
duction to  Canadian  consumption  ^  since  1883 


Pig  iron  production  in  Canada        | 

Imports 
(tons) 

Total 

consumption 

(tons) 

"Saj  9 

Fiscal 
year  ' 

From 

Canadian 

ore 

(tons) 

From 

foreign 

ore 

(tons) 

Total 
(tons) 

1884 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 

1894 

1895 

1896 

1897 

1898 

1899 

1900 

1901 

1902 

1903 

1904 

1905 

1906 

1907 

1908 

1909 

1910 

1911 

19115 

19125 

19138 

29,593 
25,770 
26,180 
39,717 
22,209 
W,823 
25,697 
20,153 
30,294 
46,948 
62,522 
31,692 
62,052 
33,254 
19,576 
31,861 
34,618 
99,758 
73,101 
46,450 
46,445 
59,452 
86,523 
67,224 

108,359 
97,826 

129,684 
52.893 

35,0004 
25,0004 
35,0004 
63,463 
46,594 
67,221 
50,581 
268,553 
274,741 
226,989 
327,267 
495,335 
349,041 
578,421 
611,605 
610,560 
634,576 

29.593 
25.770 
26,180 
39,717 
22,209 
24,823 
25,697 
20,153 
30,294 
46,948 
62.522 
66,692 
77,052 
68,254 
73,039 
78.047 
101,839 
150,339 
341,651 
321,191 
273,434 
386,719 
581,858 
416,265 
686,780 
609.431 
740,244 
587.469 
907,535 
1,014,587 
1.128,967 

62,184 
43,398 
45,648 
60,214 
48,973 
72,115 
87,613 
81.317 
68,918 
63,522 
45,790 
35,060 
37,141 
28,940 
40,995 
48,594 
65,330 
40,282 
43,064 
99,814 
73,900 
77,538 
101,663 
231,041 
238,661 
73,781 
172.127 
290.624 
208,487 
212,665 

81,777 
69,168 
71,828 
89,931 
71,182 
96,938 
113,310 
101,470 
99,212 
110,470 
108,312 
101,7624 
114,1934 
97,1944 
114,035 
126,641 
167,169 
190,621 
384,718 
421,005 
347,334 
464.627 
683.621 
647,677 
925,441 
683,212 
912.371 
878,093 
1,120,152 
1,280,176 

36.2 
37.3 
36.5 
44.3 
31.1 
25.6 
23.5 
20.0 
30.1 
42.5 
67.7 
65.2 
67.5 
70.0 
63.1 
61.6 
60.9 
78.9 
88.8 
76.8 
78.8 
83.3 
85.1 
64.5 
74.2 
88.0 
81.0 
66.9 
82.8 
79.9 

1  Canada  Year  Book,  1911,  p.  426.  2  Estimated. 

»  Ending  June  30,  until  1907;  March  31,  thereafter. 

*  Estimated  from  Table  IV.  No  bounty  paid  thereon.  The  Nova  Scotia  Steel  Company 
was  using  Newfoundland  ore  in  1895. 

5  Calendar  years;  Canada,  Report  on  the  Production  of  Iron  and  Steel  in  Canada,  1912, 
p.  6. 

'  Canada,  Preliminary  Report  on  Mineral  Proditction  in  Canada,  1913,  p.  6. 


APPENDIX 


327 


THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 


Table  EI 
Anniuil  production  of  pig  iron  by  Provinces,  since  1886 


Calendar  Year 


1887 
1888 
1889 
1890 
1891 
189« 
1893 
1894 
1895 
1896 
1897 
1898 
1899 
1900 
1901 
1902 
1903 
1904 
1905 
1906 
1907 
1908 
1909 
1910 
1911 
1912 


Nova  Scotia 

Ontario 

Quebec 

Total 

(tons) 

(tons) 

(tons) 

(tons) 

19,320 



6,507 

24,927 

17,556 

— 

4,243 

21,799 

21,289 

— 

4,632 

25,921 

18,382 

— 

3,390 

21,772 

21,353 

— 

2,538 

23,891 

40,049 

— 

2,394 

42,443 

46,472 

— 

9,475 

55,947 

41,344 

— 

8,623 

49,967 

35,192 

r 

7,262 

42,454 

32,351 

28,302 

6,615 

67,268 

22,500 

26,115 

9,392 

58,007 

21,627 

48,253 

7,135 

77,015 

31,100 

64,749 

7,094 

102,943 

28,133 

62,387 

6,055 

96,575 

151,130 

116,371 

6,875 

274,378 

237,244 

112,688 

7,970 

857,902 

201,246 

87,004 

9,635 

297,885 

164,488 

127,845 

11,121 

303,454 

261,014 

256,704 

7,588 

625,306 

315,008 

275,558 

7,845 

698,411 

366,456 

275,459 

10,047 

651,962 

352,642 

271,484 

6,709 

630,835 

345,380 

407,012 

4,770 

757,162 

350,287 

447,273 

3,237 

800,797 

390,242 

626,635 

658 

917,535 

424,994 

589,593 

— 

1,014,587 

»  Canada,  Report  on  the  Production  of  Iron  and  Steel  in  Canada,  1912,  p.  14. 


APPENDIX 


THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 

Table  HI 
Production  of  iron  ore  by  Provinces,  since  1885  ^ 


Calendar  year 

New 

Brunswick 

(tons) 

Nova 
Scotia 
(tons) 

Quebec 
(tons) 

Ontario 
(tons) 

British 

Columbia 

(tons) 

Total 
(tons) 

1886 

6,336 
31,120 
71,520 

44,388 
43,532 
42,611 
64,161 
49,206 
63,649 
78,258 
102,201 
89,379 
83,792 
68,810 
23,400 
19,079 
28,000 
18,940 
18,619 
16,172 
40,335 
61,293 
84,952 
97,820 
89,839 
11,802 

18,134 

22 

30,857 

13,404 
10,710 
14,633 
22,305 
14,380 
22,690 
22,076 
19,492 
17,783 
17,630 
22,436 
17,873 
19,420 
19,000 
15,489 
18,524 
12,035 
16,152 
12,681 
9,933 
12,748 
10,103 
4,150 
4,503 
3,616 
1,185 

16,032 
16,598 
16,894 

16,270 

2,770 

21,111 

25,126 

82,950 

272,538 

359,288 

209,634 

141,601 

193,464 

141,078 

207,769 

216,177 

263,893 

231,445 

175,686 

112,321 

3,941 

2,796 
8,372 
15,487 

950 
2,300 
1,325 
1,120 
1,222 

196 
2,099 

280 
2,071 
1,110 
7,000 
10,019 
2,290 

2,500 

64,361 

1887 

76,330 

1888 

78,587 

1889 

84,181 

1890 

76,511 

1891 

68,979 

1892 

103,248 

1893 

125,602 

1894 

109,991 

1895 

102,797 

1896 

91,906 

1897 

60,705 

1898 

68,343 

1899 

74,617 

1900 

122,000 

1901 

313,646 

1902 

404,003 

1903 

264,249 

1904 

219,046 

1905 

291,097 

1906   

248,831 

1907 

312,856 

1908   

238,082 

1909 

268,043 

1910   

269,418 

1911 

210,344 

1912  

216,883 

>  Canada,  Bejiort  on  the  Production  of  Iron  and  Steel  in  Canada,  1912,  p.  9. 


APPENDIX 


329 


THE  PRODUCTION  OF  IRON  AND  STEEL 
IN  CANADA 


Table  IV 

Iron  ore,  and  fuel  charged  to  furnaces  since  1886  '■ 


Iron  ore 

Fuel 

Canadian 
(tons) 

Imported 
(tons) 

Charcoal 
(bushels) 

Coke 

Calendar  year 

Made  from 

Canadian 

coal2 

(tons) 

Imported 
(tons) 

1887 

60,434 

64,956 

65,670 

67,304 

60,933 

96,948 

124,053 

108,871 

93,208 

96,560 

63,658 

67,881 

66,384 

71,341 

156,613 

125,604 

82,035 

180,932 

116,974 

221,733 

244,104 

209,266 

257,502 

171,191 

97,732 

71,588 

90,0003 

46,300 

55,722 

77,107 

120,650 

112,042 

361,010 

659,381 

485,911 

454,671 

861,847 

982,740 

1,117,260 

1,051,445 

1,235,000 

1,377,035 

1,628,368 

2,019,165 

040,400 

804,286 

755,800 

689,860 

441,812 

1,121,365 

1,302,720 

1,173,970 

789,561 

756,600 

1,031,800 

836,400 

1,928,025 

1,799,737 

1,835,736 

2,146,623 

2,322,030 

3,477,470 

4,404,394 

2,168,476 

1,682,085 

1,121,990 

1,779,258 

1,615,919 

1,960,459 

1,886,748 

33,581 

30,228 

36,333 

34,073 

32,796 

52,622 

65,332 

60,026 

61,629 

60,067 

35,800 

31,952 

44,844 

45,021 

207,835 

362,208 

350,190 

257,182 

365,897 

462,672 

621,068 

492,076 

412,016 

491,281 

643,933 

609,183 

1888 

1889 

1890 

1891 

1892 

1893 

1894 

1895 

1896 

33,990 

27,810 

60,407 

64,648 

69,345 

115,307 

112,314 

96,540 

130,210 

243,882 

304,676 

327,082 

325,670 

607,255 

467,850 

577,388 

658,815 

1897 

1898 

1899 

1900 

1901 

1902 

1903 

1904 

1905 

1906 

1907 

1908 

1909 

1910 

1911 

1912 

•  Canada,  Report  on  the  Mineral  Frodudion  in  Canada,  1912,  p.  81. 

2  Includes  for  the  first  ten  years  a  small  quantity  of  coal.  '  Estimated. 


330 


APPENDIX 


THE  PRODUCTION  OF  IRON  AND  STEEL 
IN   CANADA 


Table  V 

Production  of  pig  iron  in  Great  Britain,  the  United  States,  and  the 
total  world  production  ^ 


Calendar  year 

Great  Britain 

United  States 

World 

1500 

6,000 

17,000 

258,206 

368,000 

078,417 

1,248,871 

2,300,000 

3,826,752 

4,819,254 

6,963,515 

6,365,462 

7,749,233 

7,297,295 

7,875,130 

7,703,459 

8,959,691 

9,608,086 

10,000,000 

40,000 

110,000 

165,000 

315,000 

664,755 

821,223 

831,770 

1,665,178 

2,023,733 

3,835,191 

4,044,526 

9,202,703 

9,446,308 

13,734,860 

22,992,380 

27,298,545 

60.000 

1700 

104,000 

1806    

460,000 

1820 

1,010,000 

1830 

1,585,000 

1840 

2,680,000 

1850 

4,422,000 

1860 

7,180,000 

1865 

9,292,000 

1870 

11,616,000 

1875 

13,708,000 

1880 

18,254,286 

1885 

29,479,287 

1890 

27,194,294 

1895 

29,385,853 

1900    

30,557,076 

1905 

63,201,008 

1910 

64,000,000 

»  Christopher  Wood,  Iron  aiid  Steel,  Their  Production  and  Manufacture,  p.  144. 


APPENDIX 


331 


THE  PRODUCTION  OF  IRON  AND   STEEL 
IN  CANADA 


Table  VI 

The  production  of  steel  ingots  and  castings  in  calendar  years,  and 
the  imports  of  steel  ingots  and  billets  in  fiscal  years  ^ 


Year 

Product  1  (tons) 

Imports  '  (tons) 

1894 

1895 

1896 

1897 

1898 

1899 

1900 

1901 

1902 

1903 

1904 

1905 

1906 

1907 

1908 

1909 

1910 

1911 

1912 

1913 

28,767 

19,040 

17,920 

20,608 

24,125 

24,640 

26,406 

29,212 

203,881 

203,296 

166,381 

451,863 

639,396 

706,982 

588,763 

754,719 

822,284 

882,396 

957.681 

4,847 
12,757 
]  1,699 
20,608 
19,695 
10,017 
15,891 
32,597 
19,150 
16,222 

8,887 
36,814 
48,395 
88,075 
90,557 

'  Canada,  Report  on  the  Production  of  Iron  and  Steel  in  Canada,  1912,  p.  24. 
»  Canada,  Report  of  the  Department  of  Trade  and  Commerce,  1913,  p.  234, 
'  Ending  June  30,  until  1907;  March  31,  thereafter. 


332 


APPENDIX 


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APPENDIX 


333 


THE  OUTPUT  OF  IRON  AND  STEEL  PRODUCTS 
IN  CENSUS  YEARS 


Table  U 

Number  of  establishments  employing  five  employees  or  more,  value 
of  the  capital  invested,  amount  of  salaries  and  wages,  and  values 
of  the  products,  together  with  percentage  increases  for  decennial 
years,  1891-1911  ^ 


1891 

1901 

1911 

Establishments 

520 
$26,412,310 

$8,386,368 

$28,535,789 

517 

$40,861,164 

54.71 

$11,782,720 
40.50 

$34,878,402 

22.23 

824 

Value  of  capital  invested .... 
Percentage  of   decennial   in- 
crease   

$123,561,319 
202.39 

Percentage  of  increase  1891- 
1911 

367.82 

Salaries  and  wages 

$31,219,864 
164.96 
272.27 

Percentage  of  decennial  in- 
crease   

Percentage  of  increase  1891- 
1911 

Values  of  products 

$113,640,610 

225.82 

Percentage   of   decennial   in- 
crease  

Percentage  of  increase  1891- 
1911 

298.24 

1  Fifth  Census  of  Canada,  Bulletin  no.  1,  Manufactures  oj  Canada. 


334 


APPENDIX 


D 


RATES  OF  BOUNTY  IN  DOLLARS  PER  TON  ON 
VARIOUS  IRON  AND  STEEL  PRODUCTS  BY 
CLASSES  AND  BY  YEARS  — 1884-1912 


Pig  iron  made 

Puddled 
bars 

Steel  billets 
and  ingots 

Rolled 
round 

wire 
rods 

From  native  ore 

From 

foreign 

ore 

Certain 

Year 

By 
usual 
process 

By 
electric 
process 

Made  by 
electric 
process 

factures 
of  steel 

1884 

$1.50'" 
1.50 
1.50 
1.50^4 
1.50 
1.50 
1.00" 
1.00 
1.00 
2.003» 
2.00 
2.00*-' 
2.00 
2.00 
3.005/17 
3.00 

3.oo«y 

3.00 
3.00 
2.70y 
2.70" 
2.25 
1.65 
2.108P 
2.10 
1.70 
.90 

$2,108' 

2.10 

1.70 

.90 

$2.00"" 
2.00 
2.00 
2.00 
2.00 
1.80  J 
1.80"i 
1.50 
1.10 
1.108? 
1.10 

.70 

.40 

$2.00*" 
2.00 
2.00 
3.005 
3.00 
3.000 
3.00 
3.00 
2.70«^' 
2.70"' 
2.25 
1.65 
1.658P 
1.65 
1.05 
.60 

2.00^« 
2.00 
2.00 
3.005i 
2.00 
3.00« 
3.00 
3.00 
2.705 
2.70'l 
2.25 
1.65 
1.658P 
1.65 
1.05 
.65 

$1.65  8r 
1.65 
1.05 
.65 

$6.00"»» 
6.00 
6.00 
6.008? 
6.00 
6.00 
6.00 
6.009' 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 

1894 

1895 

1896 

1897 

1898 

1899 

1900 

1901 

1902 

1903 

1904 

$3.00""" 
3.00 
3.00 

1905 

1906 

1907* 

1908 

1909 

1910 

1911 

1912 

— 

•  Fiscal  year  ending  June  10  until  1907.    Calendar  year  beginnine  April  23, 1907. 

1  43  Vic,  1883,  chap.  14.  a.  tl-W  for  a  period  of  three  years  and  *3  for  three  succeeding  years. 

2  49  Vic,  1886,  chap.  38.  b.  SUM  until  1890 ;  »l  thereafter  until  1892. 

3  53  Vic,  1890,  chap.  49.  c.  *2,  1892  to  1897. 

4  57-58  Vic,  1894,  chap.  9.  d.  1894  to  1899. 

e.  When  made  in  Canada  from  Canadian  pig  made  from  Canadian  ore. 
6  60-61  Vic,  1897,  chap.  6. 

/.  Applicable  to  all  pig  iron  made  in  Canada  in  proportion  to  the  percentage  of  Canadian 
ore  used.  g.  1897  to  1902.         h.  In  proportion  to  foreign,  including  Newfoundland  ore  used. 

t.  Steel  to  include  steel  ingots  manufactured  in  Canada  from  ingredients  of  which  not  less 
than  50  per  cent  consists  of  pig  iron  made  in  Canada. 

6  62-63  Vic,  1899,  chap.  8. 

./.  All  rates  to  decrease  from  the  rates  set  forth  in  the  1907  schedule  as  follows  :  April  23, 1902, 
to  June  30, 1903,  90  per  cent :  1904,  75  per  cent :  1905,  55  per  cent :  1906,  .35  per  cent ;  1907, 25  per  cent 
k.  No  tiountv  to  be  paid  on  ingots  made  from  puddled  bars  made  in  Canada. 

7  3  Ed.  VII,  1903,  chap.  68. 

I.  The  1899  law  was  amended  to  read:  1903-04, 90  per  cent ;  1905, 75  per  cent ;  1906,  5.5  per  cent  .• 
1907,  .3.5  per  cent. 

m.  Articles  produced  from  steel  produced  in  Canada  from  ingredients  of  which  not  less 
than  50  per  cent  of  weight  consists  of  pig  iron  made  in  Canada. 

n.  Rolled  round  wire  rods  less  than  three  quarters  inch  in  diameter,  when  sold  to  wire 
manufacturers  for  use  in  their  own  factories  in  Canada  in  making  wire. 

o.  On  rolled  angles,  tees,  channels,  beams,  joists,  girders  or  bridge-building  or  structural 
eections,  and  other  rolled  shapes,  not  round,  ovnl,  square,  flat,  weighing  not  loss  than  .3.5  pounds 
per  yard,  and  also  on  flnt  eye  bar  blanks  when  sold  for  consumption  in  Canada. 

p.  On  rolled  plates  not  less  than  ."0  inches  in  width  nor  less  than  one  quarter  inch  thick  when 
sold  for  manufacturing  purposes  for  which  such  plates  are  usually  required,  not  including  plates 
to  be  sheared  into  plates  of  less  width. 

8  7  Ed.  VII,  chap.  24.    p.  Not  paj'able  on  such  iron  and  steel  when  exported  from  Canada. 
q.  Pig  iron  made  in  Canada  from  Canadian  ore  by  electric  process. 

r.  Steel  manufactured  by  electric  process  direct  from  Canadian  ore,  and  on  steel  manufac- 
tured by  electric  process  from  pig  iron  smelted  in  Canada  bv  electricity  from  Canadian  ore. 
»  10  Ed.  VII,  chap.  3.3.  a.  Bounties  on  rode  ended  June  30, 1911. 


APPENDIX 


335 


E 

BOUNTIES  PAID  ON  IRON  AND  STEEL 
PRODUCTS,  1884-1912  1 


Fiscal  year  * 

Pig  iron 

Puddled 
bars 

Steel 

Manufactures 
of  steel » 

Total 

1884 

$44,090 

38,655 

39,270 

59,596 

33,314 

37,234 

25,697 

20,153 

30,294 

93,896 

125,044 

63,384 

104,105 

65,509 

165,654 

187,954 

238,296 

351,259 

693,108 

666,001 

633,982 

624,667 

687,632 

385,231 

863,817 

693,423 

573,969 

261,434 

$5,611 

3,019 

7,706 

17,511 

10,121 

16,703 

20,550 

6,702 

11,669 

7,895 

6,875 

312 

$59,499 

17,366 

67,454 

74,644 

64,360 

100,058 

77,431 

729,102 

347,990 

676,318 

941,000 

675,529 

1,092,201 

838,100 

695,752 

360,456 

$15,324 
231,324 
369,832 
338,999 
347,133 
333,091 
638,812 
626,858 
166,750 

$44,090 

1885 

1886 

38,65S 
39  270 

1887 

1888 

1889 

1890 

69,696 
33,314 
37,234 
25,697 

1891 

20,153 
30,294 
93,896 

1892 

1893 

1894 

1895 

1896 

125,044 
63.384 
169,215 

1897 

85  894 

1898 

240,814 

1899 

280,109 

1900 

312,777 

1901 

468,020 

1902 

791,089 

1903 

1,401,805 

1904 

908,962 

1905 

1,540,204 

1906 

2,004,339 

1907 

1,299,801 

1908 

2,803,153 

1909 

1,864,614 

1910 

1911 

1,808,533 
1,138,748 

1912 

166,750 

1884-1895 

1896-1912 

$610,607 
7,097,041 

$113,674 

$6,706,990 

$2,868,122 

$610,607 
$16,786,827 

Total 

$7,707,648 

$113,674 

$6,706,990 

$2,868,122 

$17,396,434 

*  Compiled  from  Reports  on  Mineral  Production  in  Canada,  1910  and  1912. 

2  Ending  June  30  until  1907;  March  31,  thereafter. 

»  In  1904-06,  $127,755  paid  on  angles  and  plates;  the  rest  on  rods. 


APPENDIX 


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APPENDIX  337 

RATES  OF  DUTY 

Table  H 

Acts  affecting  the  customs  rates  on  certain  iron  and  steel  products, 
m5-19U 

1845.  8-9  Vic,  chap.  93,  Statutes  at  Large. 

An  Act  to  regulate  the  trade  of  the  British  Dominions  abroad,  upon 

any  articles  imported  into  such  possessions  from  countries  other 

than  Great  Britain  and  British  possessions. 
1847.  10-11  Vic,  chap.  31,  repealed  the  imperial  duties  and  reimposed  a 

Canadian  schedule  of  customs  duties. 

1858.  22  Vic,  chap.  76. 

1859.  22  Vic,  chap.  2. 

1867.  31  Vic,  chap.  7. 

1868.  31  Vic,  chap.  44. 

1870.  33  Vic,  chap.  9,  iron  in  blooms  and  billets  made  free;  coal  and  coke 
subjected  to  a  duty  of  $.50  per  short  ton. 

1871.  34  Vic,  chap.  10;  coal  and  coke  made  free. 

1879.  42  Vic,  chap.  15. 

1880.  43  Vic,  chap.  18;  bituminous  coal,  $.50  per  ton;  slabs,  blooms,  and 
billets,  10%. 

1882.  45  Vic,  chap.  6;  iron  and  scrap  of  certain  kinds,  $1  per  ton;  steel 
billets  free  until  1883. 

1883.  46  Vic,  chap  13;  iron  and  steel,  old  and  scrap,  free;  rails  free. 

1884.  47  Vic,  chap  30;  wire  rods  less  than  one  half  inch  in  diameter, 
5%;  steel  ingots,  bars  and  other  rods,  $3  per  ton +  10%. 

1886.  49  Vic,  chap.  18;  slabs,  blooms,  billets,  10%;  iron  and  steel,  old 
and  scrap,  defined. 

1887.  50-51  Vic,  chap.  39. 
1894.  57-58  Vic,  chap.  33. 
1897.  60-61  Vic,  chap.  16. 

1897.  61  Vic,  chap.  37;  British  preference  of  25%  granted. 

1900.  63-64  Vic,  chap.  15;  British  preference  made  83f%. 

1903.  3  Ed.  VII,  chap.  15;  iron  and  steel  railway  bars  and  rails,  $7  per 
ton,  put  in  force  by  order-in-council,  August  27,  1904. 

1907.  6-7  Ed.  VII,  chap.  11;  drawback  of  99%  of  duty  on  coal  used  for 
smelting  purposes  allowed. 

1914.  Memorandum  of  the  Department  of  Customs,  Canada,  April  7,  rolled 
iron  and  steel  beams,  etc.,  n.  e.  s.  (weighing  less  than  120  pounds 
per  lineal  yard),  general  tariff,  $7;  intermediate  tariff,  $6;  British 
preference,  $4.50. 

Wire  rods,  $2.25  under  the  British  preference  and  $3.50  under  the 
intermediate  and  general  tariffs,  provided  that  imported  rods  used 
in  the  manufacture  of  galvanized  iron  and  steel  wire  numbers 
9,  12,  and  13  shall  receive  a  drawback  of  99  per  cent  of  the  duty 
paid. 


APPENDIX 


G 


EXPORTS  AND  IMPORTS  OF  IRON  AND  STEEL 


Table  I 
Exports  by  years 


Fiscal  year ' 


1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875, 
1876, 
1877. 
1878, 
1879. 
1880. 
1881. 
1882. 
1883, 
1884. 
1885. 
1886. 
1887. 
1888. 
1889. 
1890. 
1891. 
1892. 
1893. 
1894. 
1895. 
1896. 
1897, 
1898 
1899 
1900 
1901 
1902 
1903 
1904 
1905 
1906 
1907 
1908 
1909 
1910 
1911 
1912 
1913 


Exports  of  iron  and 
steel  2 


$466,420 
401,770 
692,326 
766,111 
1,081,430 
1,492,306 
909,191 
727,105 
658,268 
646,266 
646,313 
446,602 
719,163 
643,107 
664,312 
661,624 
465,935 
296,122 
276,098 
347,425 
423,488 
296,719 
294,728 
257,491 
243,867 
316,454 
295,924 
308,711 
606,946 
522,988 
606,082 
706,411 
,425,163 
,432,661 
,460,781 
,263,940 
991,821 
,123,354 
,597,306 
,109,748 
670,671 
,489,987 
,487,890 
,671,927 
,336,231 
,084,565 


Exports  of  pig  iron 
(calendar  year)  ' 


$65,448 

81,381 

32,645 

149,190 

88,052 

693,739 

778,619 

78,382 

200,363 

22,284 

7,429 

13,504 

10,614 

186,778 

296,310 

271,968 

301,702 


Exports  of 
iron  ore ' 


$7,530 

76,474 

114,850 

135,463 

138,775 

66,649 

132,074 

23,039 

71,934 

39,945 

60,289 

31,376 

32,582 

36,935 

26,114 

9,026 

6,743 

6,736 

2,492 

402 

4,063 

7,689 

150,657 

1,303,901 

733,230 

579,883 

640,909 

345,640 

65,367 

46,686 

71,663 

80,640 

304,718 

133,361 


»  Ending  June  30  until  1907;  March  31,  thereafter. 

'  Compiled  from  the  Report  of  the  Department  of  Trade  and  Commerce,  1913,  part  IV. 

S  Canada,  The  Produclion  of  Iron  and  Steel  in  Canada,  1912,  p.  21. 


APPENDIX 


339 


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APPENDIX 


341 


EXPORTS  AND  IMPORTS  OF  IRON  AND  STEEL 

Table  IH 

Value  of  Imports  of  pig  iron,  wrought  scrap  iron,  steel  billets,  etc., 
and  of  ferro-products,  by  years,  1888-1914  ^ 


Fiscal  year  ' 

Pig  iron 

Wrought  scrap 
iron  '' 

Steel  billets, 

ingots,  slabs, 

blooms  and  bars  * 

Ferro 
products 

1880 

$371,966 

715,997 

1,023,012 

1,144,749 

723,010 

672,759 

688,569 

631,808 

648,012 

864,762 

1,148,078 

1,085,929 

886,485 

766,567 

618,755 

372,130 

406,317 

327,161 

405,636 

472,034 

850,286 

655,154 

585,803 

1,354,926 

894,728 

857,879 

1,401,047 

2,281,535 

3,493,600 

873,932 

2,127,135 

3,613,931 

3,612,969 

4,153,738 

2.294,363 

$168,100 
220,167 

333,092 
679,323 
652,842 
433,696 
667,907 
355,742 
217,531 
179,716 
91,169 
491,415 
298,243 
635,008 
339,582 
619,398 
668,971 
298,196 
210,561 
325,371 
412,537 
606,698 
140,859 
191,782 
408,075 
647,942 
810,564 
614,940 

$362,463 
206,975 
419,543 
380,034 
219,045 
319,665 
663,794 
467,554 
600,012 
180,354 
678,524 
949,592 
1,64',919 
1,814,842 
842,441 

1881 



1882 



1883 



1884 



1885 



1886 



1887 

$1,436 

1888 

29,812 

1889 

72,108 

1890 

18,895 

1891 

23,930 

1892 

40,711 

1893 

16,868 

1894 

9,886 

1895 

6,408 

1896 

12,811 

1897 

9,233 

1898 

22,516 

1899 

22,539 

1900 

39,064 

1901 

38,954 

1902 

150,977 

1903 

162,710 

1904 

75,554 

1906 

246,813 

1908 

462,739 

610,876 

1908 

612,062 

388,024 

1910 

382,486 

431,331 

1912 

469,884 

712,656 

1914  » 

723,104 

1  Compiled  from  the  Reports  of  the  Department  of  Trade  and  Commerce,  especially  1905 
and  1913,  which  give  summaries  of  the  imports  for  periods  of  years. 

2  Ending  June  30  until  1907;  March  31,  thereafter. 

'  Monthly  summary  of  commerce,  December,  1914,  nine  months. 
♦  Separate  Bgures  not  available  for  earlier  years. 


342 


APPENDIX 


EXPORTS  AND  IMPORTS  OF  IRON  AND  STEEL 

Table  IV 

Value  of  Imports  of  steel  rails,  wire  rods,  bar  iron  and  steel,  and 
structural  steel,  by  years,  1885-1914  ^ 


Fiscal  year ' 


1885.. 
1886.. 
1887. 
1888.. 
1889.. 
1890.. 
1891.. 
1892.. 
1893  . 
1894.. 
1895.. 
1896.. 
1897.. 
1898.. 
1899.. 
1900.. 
1901.. 
1902.. 
1903.. 
1904.. 
1905.. 
1906.. 
1907.. 
1908. . 
1909.. 
1910., 
1911.. 
1912., 
1913., 
1914  > 


Steel  rails 


$975,757 

905,125 
1,431,792 
1,232,531 
1,921,932 
2,205,085 
3,197,280 
1,738,661 
2,349,789 
2,018,733 

926,113 
1,155,173 
1,526,211 
1,899,099 
1,800,842 
2,926,366 
3,742,609 
2,952,130 
4,489,968 
4,678,572 
6,533,923 
1,197,170 
1,867,865 
1,278,084 

797,479 
1,398,373 

895,984 
2,452,135 
3,847,865 
4,620,204 


Wire  rods 


$225,037 


654,538 

658,153 

765,777 

1,196,593 

645,136 

1,523,792 

1,415,447 

1.134,149 

792,078 

478,991 

306,039 

295,122 

638,378 

749,117 

933,912 

1,033,397 

2,144,405 

1,330,202 


Bar  iron  and 
steel 


$232,243 

174,381 

168,051 

109,116 

121,096 

139,312 

372,073 

448,592 

526,790 

448,942 

947,420 

1,328,342 

1,024,612 

875,654 

1,542,046 

2,147,785 

2,597,097 

1,211,217 

1,951,745 

3,180,525 

2,948,486 

3,916,748 

3,272,708 


Structural 
steel 


$220,457 

267,439 

240,805 

250,427 

270,261 

838,139 

832,115 

365,201 

1,060.618 

659,740 

1,106.942 

1,329,077 

1,276,623 

1,766,872 

1,972,012 

2,418,443 
1,998,568 
1,988.568 
3,102,340 
4.793,960 
5,261,613 
7,841,073 


•  Compiled  from  Reports  of  the  Department  of  Trade  and  Commerce,  1905  and  1913. 
»  Ending  June  30  until  1907;  March  31,  thereafter. 
'  Nine  months  ending  December  31,  1914. 


APPENDIX  343 

H 

AMERICAN  PRICES  OF  CERTAIN  IRON  AND 
STEEL  PRODUCTS,  BY  YEARS,   1860-19121 


Year 

Pig  iron 

(No.  1 
Foundry 
Philadel- 
phia) 

Bar  iron 

(best) 

Rails 

NaUs 

Iron 

Steel 

Cut 

Wire 

1860 

$22.70 
20.26 
23.92 
35.24 
59.22 
46.08 
46.84 
44.08 
39.25 
40.61 
33.23 
35.08 
48.94 
42.97 
30.19 
25.53 
22.19 
18.92 
17.67 
21.72 
28.48 
25.17 
25.77 
22.42 
19.81 
17.79 
18.71 
20.93 
18.88 
17.76 
18.41 
17.42 
15.75 
14.52 
12.66 
13.10 
12.95 
12.10 
11.66 
19.37 
19.98 
15.87 
22.19 
19.92 
15.57 
17.88 
20.98 
22.40 
17.24 
17.46 
17.36 
15.71 
16.56 

$58.75 
00.83 
70.42 
91.04 
140.46 
106.46 
98.13 
87.08 
85.63 
81.67 
78.96 
78.54 
97.63 
86.43 
67.95 
60.85 
52.85 
45.55 
41.24 
51.85 
62.04 
58.05 
54.51 
44.24 
38.45 
36.59 
38.08 
43.59 
39.67 
38.30 
41.25 
38.38 
36.79 
33.53 
26.88 
28.09 
27.22 
24.73 
23.93 
43.75 
48.12 
40.38 
43.53 
39.59 
33.17 
41.89 
43.23 
40.87 
39.87 
39.42 
37.00 
32.80 
35.00 

$48.00 
42.38 
41.75 
76.88 

126.00 
98.13 
86.75 
83.75 
78.88 
77.25 
72.25 
70.38 
85.13 
76.87 
58.75 
47.75 
41.25 
35.25 
33.75 
41.25 
49.25 
47.13 
45.50 

$166.00 
158.46 
132.19 
106.79 
102.52 
111.94 
120.58 
94.28 
68.75 
59.25 
45.58 
42.21 
48.21 
67.52 
61.08 
48.50 
37.75 
30.75 
28.52 
34.52 
37.08 
29.83 
29.25 
31.78 
29.92 
30.00 
28.12 
24.00 
24.33 
28.00 
18.75 
17.62 
28.12 
32.29 
27.33 
28.00 
28.00 
28.00 
28.00 
28.00 
28.00 
28.00 
28.00 
28.00 
28.00 
28.00 

$3.13 
2.75 
3.47 
5.13 
7.85 
7.08 
6.97 
5.82 
5.17 
4.85 
4.40 
4.52 
6.46 
4.90 
3.99 
3.42 
2.98 
2.57 
2.31 
2.69 
3.68 
3.09 
3.47 
3.06 
2.39 
2.33 
2.27 
2.30 
2.03 
2.00 
2.00 
1.86 
1.83 
1.44 
1.08 
1.56 
2.36 
1.47 
1.31 
2.21 
2.46 
2.29 
2.29 
2.38 
2.01 
2.50 
2.13 
1.86 
1.83 
1.82 
1.84 
1.71 
.71 

1861 



1802 



1863 



1864 



1865 



1866 



1867 



1868 



1869 



1870 



1871 



1872 



1873 



1874 



1875 



1876 



1877 



1878 



1879 



1880 



1881 



1882 



1883 



1884 



1885 



1886 



1887 

$3.15 

1888 

2.55 

1889 

2.49 

1890 

2.51 

1891 

2.04 

1.70 

1893 

1.49 

1894 

1.11 

1895 

1.69 

1896 

2.54 

1897 

1.46 

1.45 

1899 

2.60 

1900 

2.78 

1901 

2.41 

1902 

2.15 

1903 

2.13 

1904 

1.96 

1905 

1.93 

1906 

1.98 

1907 

1.82 

1.99 

1909 

1.77 

1910 

1.88 

1911 

1.81 

1912 

1.74 

>  Mineral  Industry,  1909,  pp.  423-24,  and  United  States,  Bulletin  of  the  Bureau  of 
Labor,  no.  114,  March,  1913. 


S44  APPENDIX 


THE  COMBINATION  MOVEMENT  IN  THE  CANA- 
DIAN IRON  AND  STEEL  INDUSTRY 

Table  I 
Amalgamations 

Canada  Car  and  Foundry  Company. 
Formed  in  1910  to  include 
Canada  Car  Company; 
Dominion  Car  and  Foundry  Company; 
Rhodes  Curry  Car  and  Foundry  Company; 
Pratt  and  Letcliwortli  Company  (added  in  1911); 
Canadian  Steel  Foundries  (stock  ownership). 
Canada  Iron  Corporation. 
Formed  in  1908  to  include 
Mines  in  Ontario; 
John  McDougall  &  Company; 
Drummond  Iron  Mining  Company; 
Annapohs  Iron  Mining  Company; 
Canada  Iron  Furnace  Company; 
Canada  Iron  and  Foundry  Company; 
Londonderry  Iron  and  Mining  Company. 
Canadian  Steel  Foundries. 
Formed  in  1911  to  include 
Montreal  Steel  Works; 
Ontario  Iron  and  Steel  Company. 
Dominion  Steel  Corporation. 
Formed  in  1909  to  include 

Dominion  Coal  Company,  an  earlier  consolidation, 

Sydney  and  Louisburg  Railway  Company,  formed  1909 
as  a  subsidiary. 
Dominion  Iron  and  Steel  Company; 

Cumberland  Railway  and  Coal  Company,  an  earlier  con- 
solidation, added  in  1910. 
Sydney  Lumber  Company  (stock  ownership,  1911). 
Lake  Superior  Corporation. 

Formed  in  1905  to  control,  besides  miscellaneous  industries, 
Algoma  Steel  Corporation,  1911; 
Algoma  Steel  Company; 
Algoma  Commercial  Company; 


APPENDIX  345 

Cannelton  Coal  and  Coke  Company  (added  in  1912) ; 
Fiborn  Limestone  Company  (added  in  1912). 
Nova  Scotia  Steel  and  Coal  Company. 
Formed  in  1901  to  unite 

General  Mining  Association,  1829; 
Nova  Scotia  Steel  Company,  1895; 

New  Glasgow  Iron,  Coal  and  Railway  Company,  1891; 
Nova  Scotia  Steel  and  Forge  Company,  1892; 
Nova  Scotia  Steel  Coal  Company; 
Nova  Scotia  Forge  Company. 
Eastern  Car  Company  (added  in  1912,  all  stock  owned). 
Steel  and  Radiation  Company. 
Formed  in  1910  to  unite 
Expanded  Metal  Company; 
King  Radiator  Company; 
Taylor-Forbes  Company; 
Dominion  Radiator  Company. 
Steel  Company  of  Canada. 
Formed  in  1910  to  unite 

Hamilton  Iron  and  Steel  Company,  1899; 
Hamilton  Blast  Furnace  Company; 
Ontario  Rolling  Mills  Company; 
Canada  Bolt  and  Nut  Company,  1910; 
Toronto  Bolt  and  Forging  Company; 

purchased  the  McDonnell  Rolling  Mills  in  1903; 
Gananoque  Bolt  Company; 
Brantford  Screw  Company; 
Belleville  Iron  and  Horseshoe  Company; 
Montreal  RoUing  Mills; 
Pillow-Hersey  Company; 

Hodgson  Iron  and  Tube  Works  (purchased  in  1906) ; 
Canada  Screw  Company; 

Ontario  Tack  Company  (purchased); 
Dominion  Wire  Manufacturing  Company. 
United  States  Steel  Corporation. 

Owned  Dominion  Wire  Manufacturing  Company,  1905-10; 
Wire  plant  at  Hamilton; 
United  States  Steel  Products  Company; 
Sandwich  plant  proposed; 
Iron  ores? 


346 


APPENDIX 


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APPENDIX  347 

J 

TARIFF  MEMORIALS 

I.  Memorial  to  Minister  of  Finance 

November  21, 1911. 
To  the  Honorable  The  Minister  of  Finance,  Ottawa, 

Ont. 
Sir,  — 

This  statement  is  respectfully  submitted  for  the  consideration 
of  the  Government,  on  behalf  of  the  following  companies, 
comprising  all  the  manufacturers  of  iron  and  steel  in  Canada: 
Dominion  Iron  and  Steel  Company,  Limited,  Sydney,  Nova 
Scotia;  Nova  Scotia  Steel  and  Coal  Company,  Limited,  New 
Glasgow,  Nova  Scotia;  Londonderry^  Iron  and  Mining  Company, 
Limited,  Londonderry,  Nova  Scotia;  Canada  Iron  Corporation, 
Limited,  Radnor,  Drummondville,  Quebec,  and  Midland,  On- 
tario; Deseronto  Blast  Furnace,  operated  by  R.  J.  Mercur  & 
Co.,  Deseronto,  Ontario;  Steel  Company  of  Canada,  Limited, 
Hamilton,  Ontario;  Algoma  Steel  Company,  Limited,  Sault  Ste. 
Marie,  Ontario;  Atikokan  Iron  Company,  Limited,  Port  Arthur, 
Ontario. 

Since  the  last  general  revision  of  the  tariff  in  1897  serious 
changes  have  taken  place  in  the  fiscal  policy  of  the  country  affect- 
ing the  manufacture  of  pig  iron  and  steel.  At  that  date  there 
were  bounties  in  force,  which,  when  added  to  the  existing  duties, 
gave  a  protection  equal  to  $4.50  per  ton  on  pig  iron,  and  $7  to 
$8  per  ton  on  steel  billets. 

The  British  preferential  tariff  brought  about  a  general  reduc- 
tion, until  the  present  rates  were  fixed  in  1907.  It  was  definitely 
understood  that  on  the  withdrawal  of  the  bounties,  these  lowered 
duties  would  be  readjusted,  but  nothing  whatever  was  done,  and 
when  the  bounties  ceased  in  December,  1910,  the  industry  was 
left  with  the  following  inadequate  duties  on  its  basic  products :  — 

On  pig  iron,  preferential,  $1.50  per  ton;  general,  $2.50  per 
ton. 

On  steel  billets,  preferential,  $1.50  per  ton;  general,  $2.50  per 
ton. 

The  average  value  of  these  commodites,  under  ordinary  trade 
conditions,  may  be  taken  as  $15  for  pig  iron  and  $22  for  billets, 
so  that  the  preferential  tariff,  which  largely  governs  prices,  gives 


348  APPENDIX 

a  protection  of  10  per  cent  on  pig  iron  and  7  per  cent  on  steel 
billets. 

The  effective  protection  given  in  1897  and  later  years  has  thus 
been  reduced  on  these  articles  to  about  one  third  or  less.  That 
the  earlier  protection  was  effective  is  shown  by  the  increase  in 
production. 

In  1900  the  total  amount  of  pig  iron  produced  in  Canada  was 
96,575  tons,  and  of  steel,  26,456  tons. 

In  1910,  the  totals  were,  pig  iron,  740,244  tons;  steel,  740,290 
tons. 

The  present  position  of  the  iron  and  steel  trade  may  be  thus 
summarized:  — 

1.  Prior  to  1910  the  combined  protection  afforded  by  the  du- 
ties and  bounties  enabled  manufacturers  to  retain  a  sufficient 
hold  on  Canadian  business,  notwithstanding  the  competition 
from  abroad. 

2.  In  1910  the  protection  was  so  far  reduced  by  the  decrease 
in  bounties  as  to  make  it  more  difficult  to  retain  the  trade, 
while  their  cessation  on  December  31  of  that  year,  which  left 
the  manufacturers  to  the  protection  afforded  by  the  present 
inadequate  tariff  only,  has  rendered  this  difficulty  more  acute. 

3.  The  depressed  state  of  the  iron  and  steel  trade  abroad, 
coupled  with  our  inadequate  tariff,  affect  the  Canadian  trade  by 
making  it  difficult,  in  some  cases  impossible,  to  hold  the  business 
it  has  hitherto  had.  Some  manufacturers  have  expended  a  large 
amount  of  capital,  and  come  under  serious  financial  commit- 
ments in  connection  with  extensions  of  their  plants,  in  order  to 
increase  their  output,  and  the  possible  future  effect  of  the  con- 
ditions above  named  is  to  them  a  cause  of  great  anxiety. 

It  is  not  desirable  that  we  should  now  enter  on  the  question 
of  duties  on  more  finished  articles;  any  representations  on  these 
matters  are  reserved  for  the  Tariff  Commission;  but  we  should  at 
least  point  out  how  seriously  these  duties  are  weakened  by  the 
numerous  exemptions. 

The  manufacturers  of  the  most  important  lines  of  agricultural 
implements,  of  springs,  axles,  tools,  bedsteads,  windmills,  etc., 
have,  in  effect,  free  iron  and  steel,  and  in  many  cases  the  materials 
made  free  are  those  whose  manufacture  had  been  specially  pro- 
moted by  the  tariff  as  it  stood  before  the  exemptions  were  granted. 
These  exemptions  are  one  of  the  main  causes  of  the  difficulties 
in  which  we  find  ourselves. 

Another  cause  is  the  application  of  low  rates  of  duty  to  the 
larger  sizes  and  sections  of  rolled  steel.    This  has  shut  out  the 


APPENDIX  349 

Canadian  mills  from  a  large  and  important  field,  and  restricted 
them  to  the  manufacture  of  the  smaller  sections. 

The  only  other  branch  of  business  to  which  we  would  refer  is 
the  manufacture  of  wire  rods.  The  consumption  in  Canada  of 
wire  rods,  wire,  and  wire  products,  is  not  far  short  of  200,000 
tons  yearly,  and  less  than  one  half  are  made  in  Canada  from 
Canadian  raw  materials.  Since  the  cessation  of  the  bounty  wire 
rods  are  entirely  unprotected;  they  do  not  even  share  in  the  pro- 
tection accorded  to  the  billets  from  which  they  are  made.  It  is 
respectfully  urged  that  the  anomalous  position  of  this  important 
industry,  which  cannot  be  remedied  until  the  whole  tariff  is 
dealt  with,  calls  for  immediate  reUef,  and  adds  special  weight 
to  the  request  we  are  herein  preferring. 

The  statement  of  the  imports  of  iron  and  steel  into  Canada  for 
the  fiscal  year  ending  31st  March,  1911,  shows  that  the  Cana- 
dian manufacturers  have  a  large  field  yet  to  occupy.  The  unre- 
vised  trade  returns  show  imports  of :  — 

537,863  tons  of  steel  of  value  of       $14,868,752 
270,102  tons  of  pig  iron  of  value  of      3,613,931 

■    Total 807,965  Valued  at.  .  .$18,482,683 

These  imports  are  in  quantity  not  far  short  of  the  entire  present 
production  of  the  Canadian  plants,  indicating  ample  field  for 
growth,  which,  however,  cannot  be  occupied  to  any  great  extent 
under  the  existing  tariff  with  its  discriminations  and  exemptions. 

The  cost  of  labor  represents  approximately  80  per  cent  of  the 
cost  of  manufacture  of  iron  and  steel,  and  the  above  figures 
indicate  that  about  $12,000,000  was  paid  by  Canada  in  wages 
to  foreign  workmen,  for  iron  and  steel  imported  in  the  year  re- 
ferred to,  much  of  which  ought  to  have  gone  to  Canadian  work- 
men. 

A  large  increase  in  the  amount  of  iron  and  steel  made  in  Can- 
ada would,  therefore,  not  only  help  the  industry  by  reducing 
costs,  and  providing  an  adequate  return  upon  capital,  to  the  en- 
couragement of  further  development,  but  would  build  up  indus- 
trial populations  in  Canada,  by  providing  a  large  amount  of  well- 
paid  work,  now  done  for  us  abroad.  It  is  respectfully  urged  that 
such  protection  should  be  accorded  as  wiU  enable  these  results 
to  be  reached. 

We  would  also  call  attention  to  the  fact  that  the  larger  portion 
of  the  imports  above  referred  to  come  from  the  United  States, 
and  that  most  of  the  goods  thus  brought  into  Canada,  under  a 


S50  APPENDIX 

tariff  which  is  either  very  low  or  is  rendered  ineffective  by  exemp- 
tions, are  subject  to  a  very  high  rate  of  duty  when  entering  the 
United  States. 

Further,  when  depression  exists  in  the  United  States,  as  at 
present,  Canada  is  their  nearest  and  most  available  slaughter 
market.  The  "dumping"  clause  is  effective  where  a  fair  rate  of 
duty  is  imposed,  but  where  goods  are]  free,  or  are  subject  to  a 
nominal  duty  only,  the  "dumping"  clause  is  not  effective,  and 
large  quantities  of  iron  and  steel  are  now  being  sold  in  Canada 
at  or  below  the  American  cost  of  production.  This  makes  the 
need  of  some  relief  for  the  iron  and  steel  trade  a  very  immediate 
and  pressing  question. 

As  to  the  view  which  the  community  may  take  if  it  is  proposed 
to  relieve  one  special  trade  from  the  disadvantages  under  which  it 
labors,  while  others  with  a  similar  claim  to  consideration  are  un- 
touched, we  would  respectfully  urge  that  the  establishment  on 
a  sound  footing  of  the  great  basic  industries  of  iron-  and  steel- 
making  is  universally  regarded  as  one  of  the  primary  needs  of  the 
country,  and  has  been  so  considered  by  Parliament  for  the  past 
twenty-five  j'ears.  We  are  of  the  opinion  that  the  lowering  of 
duties  on  iron  and  steel  which  was  made  possible,  or  at  any  rate 
rendered  less  injurious,  by  reason  of  the  bounties,  the  continu- 
ance of  these  duties  at  the  lower  rates  when  the  bounties  are 
gone,  and  the  consequent  inadequacy  of  the  protection  afforded 
to  these  industries,  need  only  to  be  made  known  to  secure  full 
support  for  any  reasonable  remedy  from  all  who  desire  to  see 
Canada  prosper. 

The  Government  having  announced  that  a  Tariff  Commission 
will  be  appointed,  it  is  assumed  that  it  will  not  be  possible  to  deal 
with  any  changes  in  the  tariff  until  the  Commission  has  completed 
its  inquirj^  and  made  its  report. 

We  respectfully  submit  that  the  position  of  this  industry  in 
respect  to  the  tariff,  and  the  competition  to  which  it  is  exposed 
from  countries  laboring  under  great  depression  in  the  iron  and 
steel  trades,  justify  us  in  asking  special  and  immediate  considera- 
tion from  the  Government,  and  that  some  protection  should  be 
accorded,  pending  the  results  of  the  inquiry  by  the  Commission. 
The  iron  and  steel  trade  of  Canada  has  during  the  whole  of  the 
present  year  suffered  under  the  inadequate  protection  above 
referred  to,  and  unless  some  form  of  relief  is  now  given,  it  must 
continue  to  suffer  for  probably  two  years  to  come,  so  that  the 
development  of  the  industry  would  be  seriously  retarded.  Since 
no  change  in  the  duties  can  at  present  be  made,  it  is  respectfully 


APPENDIX  351 

suggested  that  there  should  be  a  temporary  bounty  on  pig  iron 
as  the  basis  of  the  industry. 

Such  a  bounty  should  be  regarded  as  a  partial  compensation 
for  the  disabilities  under  which  the  industry  has  been  placed 
through  the  lowering  of  duties,  exemptions,  and  discriminations 
referred  to,  and  through  the  withdrawal  of  bounties  without  any 
readjustment  of  the  duties,  and  should  further  be  regarded  as  in 
the  nature  of  a  temporary  measure  of  justice,  pending  a  full  con- 
sideration of  the  whole  question  by  the  Goverimient. 
We  have  the  honor  to  be,  Sir, 

Your  obedient  servants, 
Dominion  Iron  and  Steel  Company,  Limited, 

J.  H.  Plummer,  President. 
Nova  Scotia  Steel  and  Coal  Company,  Limited, 

Thomas  Cantley,  General  Manager. 
Londonderry  Iron  and  Mining  Company, 

John  J.  Drummond,  Managing  Director. 
The  Canada  Iron  Corporation,  Limited, 

Edgar  McDougall,  Vice-Pres.  and  General  Manager. 
Deseronto  Iron  Furnace  Co., 

R.  J.  Mercur  &  Company,  Operating. 
The  Steel  Company  of  Canada, 

R.  Hobson,  Vice-Pres.  and  General  Manager. 
Algoma  Steel  Company,  Limited, 

T.  J.  Drummond,  President. 
Atikokan  Iron  Company, 

By  William  Mackenzie. 

Canadian  Iimports 
Extracts  from  the  Trade  and  Navigation  returns  for  the  Year 
ending  31st  March,  1911 
Tariff  Items 

375.  Pig  iron:  270,102  tons;  value,  $3,613,931. 

Of  this  quantity,  151,349  tons,  valued  at  $2,084,729  came  from 
the  United  States.  It  is  estimated  that  nearly  one  half  of  the 
quantity  imported  from  the  United  States  was  used  in  the  manu- 
facture of  articles,  which,  under  Schedule  B  of  the  Customs 
TariflF,  obtained  a  rebate  of  99  per  cent  of  the  duty, 

Canadian  duty:  Preferential,  $1.50;  General,  $2.50. 

United  States  duty:  $2.50. 

376.  Iron  or  steel  billets,  ingots,  blooms,  slabs,  bars,  etc.,  less 
finished  than  iron  or  steel  bars,  but  more  advanced  than  pig 
iron:  47,684  tons;  value,  $929,652. 


352  APPENDIX 

Canadian  duty:  Preferential,  $1.50;  General,  $2.50. 
United  States  duty:  $6  per  net  ton. 

377.  Rolled  iron  or  steel  angles,  tees,  beams,  channels,  gird- 
ers, and  other  rolled  shapes  or  sections,  under  35  pounds  per 
yard:  56,516  tons;  value,  $1,580,387. 

Of  this  quantity,  43,613  tons  came  from  the  United  States, 
valued  at  $1,262,409. 

Canadian  duty:  Preferential,  $4.25;  General,  $7. 
United  States  duty:  $8  per  net  ton. 

378.  Bar  iron  or  steel,  rolled;  rounds,  ovals,  squares,  flats, 
etc.  N.O.P.:  104,895  tons;  value,  $3,179,921. 

Of  this  quantity,  84,650  tons,  valued  at  $2,533,747,  came  from 
the  United  States,  quite  one  half  of  which  was  used  in  the  manu- 
facture of  articles  named  in  Schedule  B  of  the  Customs  Tariff 
and  obtained  rebate  of  99  per  cent  of  the  duty. 

Canadian  duty:  Preferential,  $4.25;  General,  $7. 

United  States  duty:  $6  per  net  ton. 

379.  Rolled  iron  or  steel  beams,  channels,  angles,  etc. :  124,985 
tons;  value,  $3,209,773. 

Of  this  quantity,  78,167  tons,  valued  at  $2,134,678  came  from 
the  United  States. 

Canadian  duty:  Preferential,  $2;  General,  $3. 

United  States  duty :  $8  per  net  ton. 

379A.  Flat  eye  bar  blanks  and  universal  mill  plates,  over  twelve 
inches  wide,  for  use  in  manufacture  of  bridges,  structural  work, 
or  in  car  construction:  24,525  tons;  value,  $658,847. 

Canadian  duty:  Preferential,  $2;  General,  $3. 

United  States  duty:  $10  per  net  ton. 

380.  Boiler  plate  of  iron  or  steel,  not  less  than  30  inches  in 
width,  for  use  in  the  manufacture  of  boilers:  15,994  tons;  value, 
$492,247. 

Canadian  duty:  Free. 

United  States  duty :  $10  per  net  ton. 

381.  Rolled  iron  or  steel  plates,  not  less  than  30  inches  in 
width:  49,398  tons;  value,  $1,223,212. 

Canadian  duty:  Preferential,  $2;  General,  $3. 
United  States  duty:  $10  per  net  ton. 

382.  Rolled  iron  or  steel  sheets  or  plates,  sheared  or  unsheared 
and  skelp  iron  or  steel  N.O.P.:  25,467  tons;  value,  $756,212. 

Canadian  duty:  Preferential,  $4.25;  General,  $7. 
United  States  duty:  $10  per  net  ton. 

387A.  Steel  in  bars  or  sheets :  when  used  in  the  manufacture 
of  shovels:  1,556  tons;  value,  $44,546. 


APPENDIX  353 

Canadian  duty:  Preferential,  $2;  General,  $3. 

United  States  duty:  $6  per  net  ton. 

394.  Cast-iron  pipe  of  every  description:  25,046  tons;  value, 
$562,008. 

Canadian  duty:  Preferential,  $6;  General,  $8  per  net  ton. 

United  States  duty :  $5  per  net  ton. 

458.  Locomotive  and  car  wheel  tires  of  steel  in  the  rough: 
9,600  tons;  value,  $45,253. 

Canadian  duty :  Free. 

United  States  duty :  $5  per  net  ton. 

470.  Iron  or  steel  masts,  and  iron  or  steel  beams,  channels, 
etc.,  for  use  in  manufacture  of  ships:  14,165  tons;  value,  $417,981. 

Canadian  duty:  Free. 

United  States  duty:  $8  per  net  ton. 

471.  Rolled  round  wire  rods,  §  in.  and  under:  36,032  tons; 
value,  $965,912, 

Canadian  duty:  Free. 

United  States  duty :  $6  per  ton. 

472.  Materials  which  enter  into  the  construction  of  cream 
separators:  value,  $396,501. 

Canadian  duty:  Free. 

Exclusive  of  pig  iron  the  foregoing  shows  imports  during  the 
year  ending  March  31,  1911,  of 

Steel 537,863  tons  of  a  value  of $14,868,752 

Pig  iron..  270, 102    "         "      "         3,613,931 

Total 807,965    "         "     "         $18,482,683 

Of  the  foregoing  importations,  — 

317,786  tons  were  subject  to  duties  of  $1.50  preferential  and  $2.50  per  ton  general. 
186,878    "  "  "  4.25  "  "      8.00       "  " 

200,464    "  "  "  2.00  "  "      S.OO       "  " 

66,191    "    were  free 

75,000    "    [estimated]  were  subject  to  a  rebate  of  99  per  cent. 

It  is  estimated  that  of  total  importations  of  iron  and  steel 
into  Canada  less  than  150,000  tons  were  subject  to  the  highest 
duties;  $4.25  preferential  and  $7  general. 

11.  Anonymous 
Prices  on  Steel  Bars,  etc.,  at  Pittsburg  (taken  from  the  "Iron 
Age,"  January  4, 1912)  during  the  years  1906  to  1910  inclusive:  — 

For  home  consumption  For  export  to  Canada 

High  point,  1907-08 $1.60    per  100  lbs.  $1.50    per  100  lbs. 

Average 1.47^  per  100  lbs.  1.37^  per  100  lbs. 

Low  point,  April,  1909 1.15    per  100  lbs.  1.10    per  100  lbs. 

High  price,  1911 1.40    per  100  lbs.  1.30    per  100  lbs. 

Average  price,  1911 1.26    per  100  lbs.  1.20    per  100  lbs. 

Low  price,  1911 1.08    per  100  lbs.  1.00    per  100  lbs. 


S54  APPENDIX 

At  the  beginning  of  1910,  prices  at  Pittsburg  were  about  $1.50 
per  hundred  pounds  for  home  use  and  $1.40  for  export  to  Can- 
ada; decHne  was  gradual  during  that  year  and  early  1911,  but 
during  the  second  half  of  1911  prices  weakened  rapidly,  falling 
as  low  as  $1.08  to  $1.10  for  home  consumption,  and  on  attractive 
specifications  as  low  as  $1  for  Canada. 

American  furnaces  in  Lake  Superior  district  have  been  selling 
iron  at  $11.50  Duluth  for  delivery  into  Canada.  This  is  away 
below  cost  of  manufacture. 

Buffalo  furnaces  sell  at  a  lower  price  outside  Buffalo  district 
than  within  Canada,  a  large  quantity  of  iron  having  recently 
been  sold  in  Canada  by  Buffalo  furnaces  at  from  $12.50  to  $13.00; 
the  trade  recognize  that  this  is  below  cost. 

Average  prices  on  foundry  pig  iron  at  principal  consuming 
points  in  the  northern  United  States,  as  compared  with  prices  at 
Toronto  and  Montreal :  — 

Chicago        Buffalo        Toronto       Montreal 
'  district  district  district  district 

1906 $21.40  $20.25  $19.50  $17.75 

1907 25.50  24.50  20.00  18.50 

1908 18.50  17.50  19.00  17.25 

1909 18.50  17.50  18.25  17.00 

1910 18.00  17.00  18.25  17.25 

1911 16.00  15.00  17.50  16.75 

High $27.85      $26.75      $21.00      $19.00 

Average 19.65         18.60        18.75        17.40 

Low 15.00        14.50        16.75        16.25 

January,  1912 $15.50      $15.00      $17.25      $18.00 

It  is  a  well-understood  condition  of  the  iron  trade  throughout 
the  world  that  makers  of  pig  iron  require  to  average  up  their 
profits  by  the  prices  they  receive  in  good  years  to  enable  them 
to  overcome  the  losses  they  sustain  in  lean  years.  The  foregoing 
shows  that  the  American  makers  of  pig  iron  secured  prices  for 
their  products,  for  instance,  in  1907  that  enabled  them  to  meet 
the  low  prices  ruling  in  1911.  The  Canadian  producers  failed  to 
attain  this  position,  for  the  reasons  given  below.  The  figures  will 
further  show  that  the  Canadian  consumer  of  pig  iron  has  been 
able,  during  the  past  seven  years,  to  buy  his  metal  on  the  aver- 
age at  lower  prices  than  could  the  American  consumer  in  his  own 
market.  The  conditions  affecting  the  Canadian  iron  industry 
injuriously  were:  — 

1.  Home  competition. 

2.  Keen  competition  from  British  iron  made  with  cheap  labor 


I.    General  Mai.  of  Ca 


■> 


c 


APPENDIX  355 

and  admitted  at  preferential  duty  of  $1.G8  per  gross  ton,  or 
equal  to  about  10  per  cent  ad  valorem.  This  competition  was  very 
marked  in  the  East,  at  seaboard  points,  and  extended  to  a  greater 
or  lesser  extent  as  far  west  as  the  head  of  the  Lakes. 

3.  Crushing  competition  in  bad  years  from  United  States 
makers,  especially  in  the  Buffalo  district,  iron  being  dumped  on 
the  Canadian  market  at  unremunerative  prices,  figures  named  for 
export  to  this  country  being  often  fully  $2  per  ton  lower  than 
those  charged  to  local  consumers  in  the  districts  of  the  United 
States  furnaces.  The  "dumping"  clause  of  the  tariff  could  not, 
however,  be  apphed,  as  Buffalo  furnaces  sometimes  sold  part  of 
their  product  for  delivery  to  distant  points  in  their  own  country 
at  prices  as  low  as  for  shipment  to  Canada. 

During  the  period  of  years  from  1906  to  1911  inclusive  the 
highly  developed  industry  of  the  northern  United  States  re- 
ceived approximately  $18.50  per  gross  ton  at  the  furnace  for 
its  product,  whereas  the  undeveloped  Canadian  industry  re- 
ceived about  $17.50  at  furnace. 

Prices  on  foundry  pig  iron  delivered  at  principal  consuming 
points  in  Ontario,  such  as  Toronto,  Hamilton,  Brantford,  Gait, 
Guelph,  etc.,  during  the  years  mentioned  below:  — 

U.S.  English      Canadian 

1906 $23.50      $19.50       $19.50  1       Avge.  $18.85  delivered. 

$1.10  Freight  from 

furnace. 
$17.75  at  Canadian 

furnace. 
$16.15  at  Canadian 
Jan.,  1912 17.25        19.00        17.25  J  furnace. 

From  the  above  it  will  be  noted  that  prices  on  Canadian-made 
pig  iron  are  governed  by  the  lowest  prices  obtainable  from  out- 
side sources. 

It  is  estimated  that  fully  75,000  tons  of  pig  iron  are  imported 
annually  by  manufacturers  of  agricultural  machinery,  on  which 
a  rebate  of  99  per  cent  of  the  duty  is  allowed,  equal  to  about 
$2.80  per  gross  ton  from  United  States  sources  and  $1.68  from 
English  sources.  This  rebate  would  have  to  be  absorbed  by 
Canadian  furnaces  to  secure  this  share  of  the  business. 


1907. .  . . 

...  27.75 

20.25 

20.25 

1908. .  . . 

...  20.75 

19.00 

19.00 

1909. .  . . 

...  20.50 

18.25 

18.25 

1910. .  . . 

...  20.00 

18.50 

18.50 

1911.... 

...  18.00 

18.50 

18.00 

1912.... 

...  17.25 

19.00 

17.25 

i.RiTiME  Provinces 


IS"        Groenwiob        6^° 


II.    AUp  of  the  JIauitime  Peov 


BIBLIOGRAPHY 


BIBLIOGRAPHY 

Of  the  literature  available  on  the  conditions,  historj^,  and  de- 
velopment of  the  Canadian  iron  and  steel  industry,  the  greater 
part  is  scattered,  and  not  readily  available.  The  early  history 
has  been  rather  satisfactorily  treated  in  the  Report  of  the  Geologi- 
cal Survey  of  1873-187 Jt,  in  Bartlett's  paper  on  The  Manufacture 
of  Iron  in  Canada,  and  in  the  1908  Report  of  the  Ontario  Bureau 
of  Mines,  as  well  as  the  Report  of  the  Royal  Commission  on  the 
Mineral  Resources  of  Ontario.  For  more  recent  development 
the  writer  has  relied  on  editorial  articles  in  trade  and  financial 
journals,  annual  Government  reports,  the  innumerable  papers 
published  in  the  various  magazines  and  journals,  and  also  a  few 
secondary  sources. 

Many  of  the  sources  of  information,  particularly  the  earlier 
papers,  give  chief  attention  to  the  matter  of  resources,  but,  of 
recent  years,  the  tariff  and  bounties,  trusts  and  finance,  have  come 
into  prominence.  Porritt's  articles  and  books  on  protection  and 
bounties  are  unnecessarily  partisan  on  the  free-trade  side,  and 
unfortunately  devote  too  much  attention  to  the  political  aspects 
of  the  situation.  Sixty  Years  of  Protection  in  Canada  suffers  from 
the  lack  of  an  intensive  knowledge  of  the  individual  schedules; 
The  Revolt  in  Canada  is  altogether  too  dogmatic  in  character  to 
be  convincing.  Mr.  McLean's  The  Tariff  History  of  Canada,  while 
accurate,  is  rather  non-critical.  Unfortunately  it  does  not  cover 
the  period  from  1894  to  the  present.  The  House  of  Commons  De- 
bates are  not  a  valuable  source  of  detailed  information.  Mr.  Field's 
annual  discussions  of  industrial  combinations  describe  financial 
phases  of  the  Canadian  mergers;  but  little  attempt  has  been  made 
to  estimate  the  actual  extent  of  consolidation.  Mr.  G.  E.  Drum- 
mond's  numerous  papers  on  the  Canadian  iron  industry  give 
the  fairest  statement  of  the  case  for  protection.  Of  Government 
documents,  the  reports  on  the  Production  of  Iron  and  Steel  in 
Canada  are  by  far  the  most  valuable.  The  annual  reports  and 
pamphlets  issued  by  the  iron  and  steel  companies  themselves, 
together  with  the  circulars  of  established  financial  houses,  the 
prospectuses  of  corporations,  and  the  memorials  presented  to  the 
Government  in  favor  of  protection  are,  however,  quite  inter- 
esting, and  contain  most  significant  information. 


360  BIBLIOGRAPHY 

The  following  list  of  references  is  practically  complete,  except 
in  respect  to  short  articles  published  in  a  number  of  trade  and 
other  journals.  A  reference  to  the  indices  of  these  journals  will 
unearth  many  more  sources  generally  referred  to  under  Group  II. 
The  more  important  of  such  articles  have  been  listed.  The  ab- 
breviations which  follow  the  list  of  trade  journals  and  bulletins 
explain  the  references  in  Group  VII. 


BlBLIOGRAPHIEa 

1.  Canada:  Geological  Survey:  General  Index  to  the  Reports 
of  Progress,  1863-84.   (C.G.S.) 

2.  Canada:  Geological  Survey:  A  list  of  publications  on  the 
economic  minerals  of  Canada;  1888. 

3.  Gagnon,  Phileas:  Essai  de  BibKographie  Canadienne.  Que- 
bec, 1895. 

4.  United  States:  Library  of  Congress:  Select  list  of  books  with 
references  to  periodicals  relating  to  iron  and  steel  in  com- 
merce, by  A.  P.  C.  Griffin.  Washington,  Government  Print- 
ing Office,  1907. 

5.  University  of  Toronto:  Review  of  Historical  Publications 
Relating  to  Canada.  Toronto,  University  Press;  1896-. 

6.  Canada:  Geological  Survey:  Catalogue  of  Publications  of  the 
Geological  Survey  of  Canada;  1910. 

n 

Trade  Journals  and  Magazines 

1.  American  Industry.   (A.I.) 

2.  American  Manufacturer  and  Iron  World.  Pittsburg.   (A.M.) 

3.  Canadian  Engineer.  Toronto.   (C.E.) 

4.  Canadian  Mining  Review.  Toronto.   (C.M.R.) 
Canadian  Mining  Journal.  Toronto,  since  1907.   (C.M.J.) 

5.  Canadian  Manufacturer.    Toronto.   (CM.) 

6.  Colliery  Guardian.  London.    (C.G.) 

7.  Commercial  and  Financial  Chronicle.  New  York.   (Chr.) 

8.  Economist.  London.   (E.C.) 

9.  Engineering  and  Mining  Journal.  New  York.   (E.M.J.) 

10.  Engineering  Magazine.  New  York.   (E.M.) 

11.  Engineering  News.  New  York.   (E.N.) 

12.  Financial  Post.  Toronto.   (P.P.) 

13.  Hardware  and  Metal.  Toronto.   (H.  &  M.) 


BIBLIOGRAPHY  361 

14.  Iron  Age.  New  York.   (I.A.) 

15.  Iron  and  Coal  Trades  Review.  London.  (I.C.T.R.) 

16.  Iron  and  Steel  Trade  Journal.  London.   (I.S.T.J.) 

17.  Iron  Trade  Review.  New  York.   (I.T.R.) 

18.  Mines  and  Mining.  Cleveland.   (M.  &  M.) 

19.  Mining  World  and  Engineering  Record.  New  York.    (M.W. 
&  E.R.) 

20.  Monetary  Times.  Toronto.  (M.T.) 

in 

Annual  Publications 

1.  American  Iron  and  Steel  Association:  Directory  of  Works. 
1908  edition,  Philadelphia. 

2.  Annual  Financial  Review.   Canadian.  Toronto. 

3.  Burdette's  Official  Intelligence.  London. 

4.  Canadian  Almanac.  Toronto. 

5.  Canadian  Annual  Review.  Toronto. 

6.  Canadian  Mining  Manual.  Toronto. 

7.  Canadian  Trade  Index  (Canadian  Manufacturers'  Associa- 
tion.)  Toronto. 

8.  Commercial  Intelligence.  London. 

9.  Heaton's  Annual  Commercial  Hand-Book  of  Canada.    Bea- 
ton's Agency.  Toronto. 

10.  Ingalls,  W.  R.,  Mineral  Industry.    New  York. 

11.  Moody's  Corporation  Manual.  New  York. 

IV 

Bulletins  and  Papers  of  Associations  and  Institutes 

1.  American    Institute    of    Mining    Engineers:    Transactions 
and  Proceedings.   (A.I.M.E.) 

2.  American  Iron  and  Steel  Association  Bulletin.   (A.I.  &  S.A.) 

3.  Canadian  IVIining  Institute:  Quarterly  Bulletin.  (C.M.I.) 

4.  Mining  Association  of  Quebec.   Transactions.   (M.A.Que.) 

5.  Mining  Society  of  Nova  Scotia.   Transactions.    (M.S.N.S.) 

6.  Roval  Society  of  Canada;  Proceedings  and  Transactions. 
(R.S.C.) 

7.  Iron  and  Steel  Institute :  Journals. 


BIBLIOGRAPHY 


Books  and  Pamphlets 

1.  Bartlett,  R.  J.,  Canada's  Century.  London,  1907. 

2.  Campbell,  D.,  History  of  Nova  Scotia.  Montreal,  1873. 

3.  Chisholm,  G.  G.,  Commercial  Geography.    New  York,  1899. 

4.  Day,  S.  P.,  English  America.  London,  1864. 

5.  Gesner,  a..  Industrial  Resources  of  Nova  Scotia.    Halifax, 
1849. 

6.  Harpell,  J.  J.,  Canadian  National  Economy.  Toronto,  1911. 

7.  Hopkins,  J.  C.,  Canada;  an  Encyclopedia.  Toronto,  1899. 

8.  HoLLiNGSWORTH,  S.,  The  Present  State  of  Nova  Scotia.   1787. 

9.  Jeans,  J.  S.,  Canada's  Resources  and  Possibilities.   London, 
1904. 

10.  Kalm,  Peter,  Travels  in  North  America.  London,  1771. 

11.  Kemp,  J.  F.,  The  Ore  Deposits  of  the  United  States  and  Canada. 
New  York,  1900. 

12.  MacDonald,  C.  O.,  The  Coal  and  Iron  Industries  of  Nova 
Scotia.  Halifax,  1909. 

13.  McLean,  S.  J.,  The  Tariff  History  of  Canada.  University 
of  Toronto  Studies  in  Political  Science,  No.  4.  Toronto, 
1895. 

14.  PoRRiTT,  E.,  Sixty  Years  of  Protection  in  Canada.  London, 
1908. 

15.  PoRRiTT,  E.,  The  Revolt  of  Canada  against  the  New  Feudalism: 
The  Tariff  History  of  Canada  from  the  Revision  of  1907  to  the 
Uprising  of  the  West  in  1910.  London,  1911, 

16.  Smith,  W.  H.,  Canada.  Toronto,  1852. 

17.  Smith,  J.  R.,  The  Story  of  Iron  and  Steel.  New  York,  1908. 

18.  Swank,  J.  M.,  Iron  in  all  Ages.  Philadelphia,  1892. 

19.  Thwaites,  R.  G.,  Jesuit  Relations.  Cleveland,  1901. 

20.  Wilson,  A.  J.,  Resources  of  Modern  Nations.  London,  1878. 

21.  Wood,  C,  Iron  and  Steel:  Their  Production  and  Manufacture. 
London,  1911. 

22.  Nova  Scotia  Steel  and  Coal  Company,  Pamphlets.  1908 
and  1909. 

23.  Dominion  Steel  Corporation,  Pamphlet,^1911. 

24.  The  Iron  Ore  Resources  of  the  World.  Stockholm,  1910. 

25.  Memorial  of  Canadian  Iron  and  Steel  Companies  to  the  Fi- 
nance Minister,  November  21,  1911. 

26.  Pamphlet,  obviously  circulated  by  the  iron  and  steel  inter- 
ests, 1912. 


BIBLIOGRAPHY  363 

27.  Financial  circulars  and  pamphlets  of  bond  houses  and  stock- 
brokers. 

28.  Prospectuses  of  corporations. 

29.  Annual  reports  of  corporations. 

VI 

GOVEHNMENT   REPORTS 

Federal;  annual  and  special 

1.  Annual  Reports  of  Progress  of  the  Geological  Survey:  es- 
pecially 1873-74:  Harrington,  "Notes  on  the  Iron  Ores  of 
Canada  and  their  Development." 

2.  Canada's  Fertile  Northland.   1907. 

3.  Reports  of  the  Mines  Branch  of  the  Department  of  Mines. 

4.  Annual  Reports  of  Mineral  Production  in  Canada  (since 
1906). 

5.  The  Production  of  Iron  and  Steel  in  Canada  in  Calendar 
Years.   Mines  Branch  of  the  Department  of  Mines. 

6.  Resource  Map  of  Canada.  Department  of  Interior. 

7.  Reports  of  the  Department  of  Trade  and  Commerce. 

8.  Auditor-General's  Reports. 

9.  House  of  Commons  Debates. 

10.  Census  Reports,  1871,  1881,  1891,  1901,  1911. 

11.  Canada  Year  Book. 

12.  Report  on  the  Mining  and  Metallurgical  Industries  of  Can- 
ada, 1907-08. 

13.  Report  on  the  Iron  Ore  Deposits  of  Nova  Scotia,  by  J.  E. 
Woodman,  1909.  Mines  Branch  of  the  Department  of  Mines. 

14.  Report  on  the  Iron  Ore  Deposits  of  Vancouver  and  Texada 
Islands,  B.C.,  by  E.  Lindeman.  Mines  Branch  of  the  De- 
partment of  Mines,  1909. 

15.  Report  on  Experiments  made  at  Sault  Ste.  Marie  under 
Government  Auspices  in  the  Smelting  of  Canadian  Iron  Ores 
by  the  Electro-thermic  Process,  by  Eugene  Haanel,  1907. 

16.  Report  of  a  Commission  to  investigate  the  Different  Electro- 
thermic  Processes  for  Smelting  Iron  Ores  and  Making  Steel 
in  Operation  in  Europe,  by  Eugene  Haanel,  1906. 

17.  Reports  of  the  Commission  of  Conservation. 

18.  Statutes. 

Provincial 
1.  Annual  Reports  of  the  Ontario  Bureau  of  Mines,  Toronto. 
(The  1908  report  is  of  special  value.) 


364  BIBLIOGRAPHY 

2.  Report  of  Royal  Commission  on  the  Mineral  Resources  of 
Ontario,  1890.  (This  gives  an  excellent  summary  of  the 
early  history  of  the  industry  of  Ontario.) 

3.  Nova  Scotia,  Department  of  Mines  Reports. 

4.  Reports  of  the  Minister  of  Mines,  British  Columbia. 

5.  Reports  on  mining  operations  in  Quebec. 

6.  Law  Reports.    (Privately  printed.) 

7.  Report  of  Department  of  Crown  Lands,  New  Brunswick. 

8.  Statutes. 

United  States 

1.  Reports  of  the  Geological  Survey;  Mineral  Resources  of  the 
United  States.   Washington,  Government  Printing  OflSce. 

2.  Aldrich  Report  on  wholesale  prices. 

3.  Statistical  Abstract  of  the  United  States. 

4.  Statutes. 

vn 

Aeticles 

Barbie,  J.  S.,  The  Coal  and  Iron  Industries  of  Eastern  Canada. 

C.G.  Feb.  15,  1901. 
Babtlett,  J.  H.,  The  Canadian  Iron  Trade.  C.M.R.  1897. 

Manufacture  of  Iron  in  Canada.    A.I.M.E., 
1885. 
Blackmobe,  W.,  The  Question  of  Free  Coal.   C.M.R.,  Jan.  31, 
1903. 
The  Development  of  Coal  Mining  in  Canada 
and  its  Effect  on  the  Industries.    C.M.R., 
Aug.  31,  1904. 
Iron  Manufacture  in  Ontario.   A.I.M.E.,  vol. 

XIV. 

Gantlet,  C.  L.,  A   Sketch  of   the   Development  and   Present 
Operations  in  the  Iron  and  Steel   Industry  of  Nova  Scotia. 
C.M.L,  1913,  pp.  310-50. 
Chambers,  R.  E.,  The  Sinking  of  Wabana  Submarine  Slopes, 
Newfoundland.    C.M.J.,  Feb.  15,  1909. 
A  Newfoundland  Iron  Deposit.    LA.,  April 
2,  1896. 
Chuech,  G.  E.,  Canada  and  its  Trade  Routes.     Fortnightly, 

vol.  LXXIX. 

Coles,  G.  W.,  The  Development  of  Canada.    Cassier's  Mag., 
1905. 


BIBLIOGRAPHY  365 

Drummond,  G.  E.,  The  Canadian  Iron  Industry;  a  New  Era. 

C.M.R.,  vol.  xvxu. 

The  Canadian  Iron  Industrj'.  C.M.I.,  1896. 

The  Canadian  Iron  Industrj\  C.M.I.,  1902. 

The  Canadian  Iron  Industry;  in  Hopkins, 

Canada,  vol.  v,  p.  508. 

Drummond,  T.  J.,  Progress  of  the  Canadian  Iron  and  Steel 

Industry.   CM.,  1910. 
Evans,  J.  W.,  Experiments  in  Steel  Direct  from  Ores  with  Elec- 
tric Furnaces;  Methods  and  Results.  C.M.I.,  1906. 
Field,  F.  W.,  Industrial  Amalgamations    in    Canada.    M.S., 

Sept.  10,  1911;  Jan.  6,  1912;  Jan.  5,  1913. 
Eraser,  J.  D.,  From  Iron  Ore  to  Steel:  a  Sketch  of  Iron-making 

in  Pictou  County,  N.S.  C.E.,  vol.  ii. 
Goodwin,  W.  L.,  Helen  Iron  District.   C.M.J.,  vol.  xxxn. 
Griffins,  P.  H.,  The  Manufacture  of  Charcoal  Iron  from  Bay 
Ores  and  Lake  Ores  of  the  Three  Rivers  Dis- 
trict in  the  Province  of  Quebec.  C.J.,  1893. 
Description  of  Plants  of  Iron  and  Steel  Works 
in  Canada;  the  Location  of  their  Raw  Ma- 
terials and  their  Position  as  regards  the  Home 
and  Foreign  Markets,  together  with  Discus- 
sion of  Future  Developments.    C.M.J.,  vol. 

XXXI.  I 

The      Canadian      Iron      Furnace     Company. 
A.I.M.E.,  1893. 
Gilpin,  E.,  Analysis  of  United  States  Coals  and  Other  Minerals. 

C.E.,  1897. 

Haanel,  E.,  The  Iron  Ores  of  Canada;  in  Iron  Ore  Resources  of 

the  World,  pp.  719-43,  published  by  the  Executive  Committee 

of  the  International  Geological  Congress  of  1910  (Stockholm). 

Hardman,  J.  E.,  A  New  Iron  Ore  Field  in  New  Brunswick. 

C.M.I.,  1908. 
Jeans,  J.  S.,  The  Shifting  Site  of  National  Industries  Supremacy. 
CM.,  vol.  XX. 
Future   Supremacy   in   the   Iron   Markets   of   the 
World.  E.M.,  vol.  xiv. 
Keefer,  T.  C,  The  Canals  of  Canada.  R.C.C.,  1893,  p.  46. 
Leach,  N.  L.,  Moose  Mountain  Iron  Range.   C.M.J.,  1908. 
Leith,  C  R..  The  Iron  Ores  of  Canada.   C.M.L,  1908. 
Law,  a.  p..  Iron  Ores  of  the  Labrador  Peninsula.  E.M..  vol.  xix. 
LuTY,  B.  E.  v..  Future  of  the  American  Iron  Costs.   I.C.T.R., 
1903. 


366  BIBLIOGRAPHY 

McGrath,  p.  S.,  The  Commercial  and  Industrial  Expansion  of 
Canada. 
American  Review  of  Reviews,  1904. 
Tlie  Manufacture  of  Iron  and  Steel  in  Cape 
Breton.   E.M.,  vol.  xxi. 
MoxHAM,  A.  J.,  Steel-making  in  Canada;  Canadian  Advantages. 

I.S.R.,  Nov.,  1900. 
NiTZE,  H.  B.  E.,  The  Wabana  Iron  Ore  Mines.    M.  &  M.,  1900. 
PoRRiTT,  E.,  Bounties  for  Canadian  Iron  and  Steel  Industry, 
1894-1906.   I.A.,  1906. 
Iron    and    Steel    Bounties    in    Canada.     Political 
Science  Quarterly,  1907. 
Phillips,  E.,  Competition  in  Iron-  and  Steel-making.     E.M., 

vol.  XXI. 

Stansfield,  a.,  Electro-thermic  Production  of  Steel  from  Iron 

Ore.   C.M.J.,  1907. 
Taussig,  F.  W.,  The  Iron  Industry  of  the  United  States.   Quar- 
terly Journal  of  Economics,  1900. 
WiLMOTT,  A.  B.,  The  Iron  Ores  of  Ontario.  C.M.J.,  1908. 
Iron  Mining  in  Ontario.  C.M.J.,  1907. 
The  Undeveloped  Iron  Resources  of  Canada. 
C.M.J.,  vol.  xxxii,  1901. 
WuRTLLE,  F.  C,  A  Historical  Record  of  the  St.  Maurice  Forges. 
R.S.C.,  1886. 


INDEX 


INDEX 


Abbot  Iron  Works,  171. 

Abbot-Mitchell  Iron  Co.,  239,  246. 

Acadia,  7. 

Acadia  Coal  Co.,  108. 

Agriculture,  11. 

Agricultural  implements,  88,   133, 

147,  312. 
Aitken,  W.  M.,  251,  277,  280,  282. 
Alabama  iron,  97,  202. 
Albion  coal  mines,  59. 
Algoma  Central  Ry..  172. 
Algoma   Steel   Co.,  191,  211,  242; 

bounties,     144,    303;    combines, 

267,  285,  291;  tariff,  146,  160. 
Algoma  Tube  Works,  214. 
AUen,  H.  M.,  279.  281. 
American  Steel  and  Wire  Co.,  272. 
Amherst,  119. 
Angus,  W.  F.,  269. 
Annapolis  Co.,  25,  68. 
Annapolis  Iron  Co.,  124. 
Annapolis  Iron  Mining  Co.,   224, 

268. 
Annapolis  Mining  Co.,  55,  68. 
Antigonish  County,  ores,  26,  195. 
Arisaig  County  ores,  195. 
Ashbridge's  marsh,  231. 
Atikokan  ores,  32,  271. 
Atikokan  Iron  Co.,  228,  281,  285; 

bonused,  171,  228. 
Atlas  Tack  Co.,  248. 
Autonomy  of  Canada,  65. 

Baie  St.  Paul,  68. 

Balance  of  trade,  91,  97,  104. 

Bar  iron,  duties,  66,  84  /.,  88.  132, 

312;  imports,  343;  prices,  99,  343. 
Bastican,  46,  231. 
Bathurst,  N.B.,  ores,  29,  225,  269, 
Bav  of  Quinte  Rv.,  231. 
Beile  Isd.,  ores,  113,  201. 
Belleville,  52. 
Belleville  Iron  and  Horseshoe  Co., 

250. 
Belleville  Rolling  Mills  Co.,  119. 
Benn,  J.  H.,  280,  282. 


Bentley,  Mr.,  53. 

Bessemer  ores,  24. 

Bessemer  process,  59,  98,  108,  203, 
215,  288,  291. 

Bigelow,  F.  D.,  118. 

Billets,  steel,  boimties,  34,  143, 
149/.;  duties,  66/.,  84/.,  132, 
312. 

Birge.  C.  A.,  280. 

BlackweU,  K.  W.,  118,  269,  279, 
281. 

Blair,  G.  W.,  175. 

Bloomfield  ores,  57. 

Blooms,  steel,  dutes,  66,  84,  132. 

Bonuses,  municipal,  90,  114, 171/., 
312,  317. 

Borden,  R.  L.,  protection,  142. 

Boston,  56;  smoke  nuisance  law  of, 
200. 

Bounties,  acts,  85,  88,  134, 143 ,149, 
158,  187;  combines,  310;  Mr. 
Conmee,  147;  considered,  156/.; 
Dominion  Iron  and  Steel  Co., 
158,  203;  Drummond,  G.  E.,  144; 
dumping,  electric  process,  188, 
316;  ended,  153;  farmers,  151; 
Fielding,  W.  S.,  151,  311,  312; 
foreign  countries,  136,  150  /.; 
Foster,  G.  E..  137,  154;  pay- 
ments, 103,  334,  335;  Plummer, 
J.  H.,  296;  protection,  154;  reve- 
nue, 149,  151;  315;  Tupper,  Sir 
Chas.,  140,  154,  203. 

Bourassa,  Mr.,  protection,  98. 

Brantford  Screw  Co.,  250. 

Bras  d'Or  Lake,  coal,  196,  204. 

Bridgeville,  117,  120,  287. 

British  Columbia  ores,  35,  234,  271. 

British  Columbia  Steel  Co.,  234. 

British  North  America  Act,  13. 

Buchanan,  Isaac,  protection,  83. 

Buffalo,  51,  71. 

Buffalo  Union  Furnace  Co.,  240. 

Burpee,  Mr.,  protection,  99. 

Burrows.  Thos.,  115. 

Butler,  M.  J.,  62,  298. 


370 


INDEX 


Caledonia  Ironworks,  119. 

Calgary  ores,  271. 

Canada  Bolt  and  Nut  Co.,  230,  250. 

Canada  Car  Co.,  270. 

Canada    Car   and    Manufacturing 

Co.,  61,  74. 
Canada  Furnace  Co.,  191. 
Canada  Iron  Corporation,  191,  269, 

273,  276,  279,  282;  integration, 

295. 
Canada  Iron  Furnace  Co.,  90,  101, 

109,  226,  268;  Midland  furnace, 

222,  273;  tariff,  139,  300. 
Canada  Iron  and  Manufacturing, 

46. 
Canada  Locomotive  Co.,  280. 
Canada  Screw  Co.,  220,  222,  251. 
Canada  Switch  Manufacturing  Co., 

118. 
Canada  Tin  Plate  and  Sheet  Steel 

Co.,  238. 
Canada  Titanic  Iron  Co.,  48,  63. 
Canadian  autonomy,  65. 
Canadian    Bridge    Co.,    dumping, 

185. 
Canadian  Car  and  Foundry  Co., 

226,  276,  283. 
Canadian  Coal  and  Ore  Dock  Co., 

228. 
Canadian    Hardware    Association, 

272. 
Canadian  Iron  and  Foundry  Co., 

225. 
Canadian  Iron  and  Steel  Co.,  115. 
Canadian  Manufacturers'  Associa- 
tion, 142,  182;  protection,  95. 
Canadian  Northern  Railway,  176, 

214,  228. 
Canadian  Pacific  Railway,  85,  118, 

178. 
Canadian  Steel  Foundries,  228,  270, 

276,  280. 
Canals,  Erie,  10;  industrial  develop- 
ment, 8;  iron  and  steel,  71;  St. 

Lawrence,  9,  71. 
Cannelton  Coal  and  Coke  Co.,  218, 

267. 
Cape  Breton,  coal,  195;  ores,  26. 
Capital,  lack,  13,  73,  123. 
Capitalization,  227/. 
Caverhill,  G.,  281. 
Champlain  Co.,  2,  31. 
Charcoal  iron,  70,  329. 
Charlton,  Mr.,  protection,  98. 


Cherry  Bluff,  35. 

Chesley,  J.  and  W.,  118. 

Chicago,  51,  71. 

Clementsport,  25,  55. 

Clergue,  F.  H.,  212,  267,  273,  298. 

Clergue  contract,  174,  212. 

Climate,  industrial  development,  6, 
808;  migration,  9;  population,  9; 
transportation,  10. 

Coal,  14,  70;  Bras  d'Or  Lake,  196, 
204;  Cape  Breton,  195;  Dominion 
Iron  and  Steel  Co.,  28,  205,  257; 
duties,  66,  84,  133,  146;  exports, 
200;  General  Mining  Association, 
56,  255,  289 ;  maritime  provinces, 
25;  Ontario,  33;  Quebec,  31; 
West,  36. 

Cobourg,  52. 

Cockschutt  Plow  Co.,  280,  282. 

Coke,  329;  duties,  66,  84,  133,  146; 
imports,  329. 

Colbert,  41. 

Colbrook  Rolling  Mills,  62,  118. 

Colchester  Co.  ores,  25. 

Combines,  20,  96,  113,  153,  244, 
310,  344;  boimties,  310;  in  rolling 
mill  industry,  244;  tariff,  160, 
215,  284. 

Compound  duties,  86,  96. 

Conception  Bay,  113. 

Confederation  and  the  tariff,  66. 

Conmee,  Mr.,  and  the  bounties, 
147. 

Connellsville  coke,  291. 

Conservative  party,  127,  131,  203, 
312,  318,  320;  protection,  16,  83, 
155. 

Consolidated  Lake  Superior  Co., 
formed,  212,  267;  failed,  215; 
relations  with  Ontario  Govern- 
ment, 172. 

Convict  labor,  133. 

Corn  laws,  12;  repealed,  65. 

Corporations,  123. 

Cost  of  production,  319. 

Cox,  G.  A.,  116,  281. 

Cramp  Steel  Co.,  171,  237. 

Cuban  ores,  205. 

Cugnet  et  Cie,  42. 

Cumberland  Coal  and  Railway  Co., 
28,  264,  279,  289. 

Curry  (Rhodes)  Car  and  Foundry 
Co.,  270;  119,  226. 

Curry,  N.,  280. 


INDEX 


371 


Dandurand,  R.,  281. 

Depression,  65,  83. 

Deseronto,  139.  231;  tariff,  191, 
231. 

Directorates  interlocking,  278  ff. 

Dominion  Bridge  Co.,  118. 

Dominion  Car  Co.,  228. 

Dominion  Coal  Co.,  139,  200,  205, 
257,  279,  281,  289. 

Dominion  Iron  and  Steel  Co., 
formed,  200;  reorganized,  208; 
bounties,  158,  203;  coal,  28,  205, 
257;  tariff,  138,  141,  151,  159. 

Dominion  Steel  Corporation, 
formed,  210;  240,  253,  273,  276, 
279,  283,  292;  integration,  295; 
scale  of  peoduction,  210. 

Dominion  Wire  Rope  Co.,  118. 

Drawbacks,  85,  146,  168;  manufac- 
turers, 170,  306,  312,  348. 

Drummond,  G.  E.,  280;  bounties, 
144. 

Drummond,  H.  R.,  279. 

Drummond,  T.  J.,  279,  282,  298. 

Drummondville,  109,  120,  191,  268; 
tariff,  125. 

Drummond  McCall  Pipe  Foundry, 
119;  at  Londonderry,  268,  276. 

Drummond  Mining  Co.,  269. 

Dumping,  91,  176,  182,  214,  238, 
306,  313,  350,  355;  bounties,  188, 
316;  Canadian  Bridge  Co.,  185; 
Dominion  Iron  and  Steel  Co., 
158,  203;  exports  dumped,  153, 
179;  Pender  Co.,  207;  Plummer, 
J.  H.,  181;  rails,  206. 

Duties,  66,  84,  132,  146,  312;  com- 
pound, 86,  96;  336;  Imperial,  65, 
162;  prices,  99;  specific,  87,  96. 

East  River  ores,  112. 
Eastern  Car  Co.,  197,  256. 
Electric  Furnace  Products  Co.,  232. 
Electric  Metals  Co.,  232. 
Electric  process,  231;  bounties,  149, 

315. 
Electric  Reduction  Co.,  233. 
Electric  Steel  Co.,  233. 
Emigration,  17. 
England,  121. 
Equitable  Mining  and  Developing 

Co.,  219,  250. 
Essex  Co.,  53. 
Evans,  J.  E.,  233. 


Exports,  74,  91,  110,  150,  200,  203, 
325;  dumping,  153,  179. 

Farmers,  bounties,  151;  tariff,  132, 

147,  156,  159,  312. 
Farrell,  J.,  105,  272. 
Ferrona,  89,  112,  191,  194,  287. 
Fielding,    W.    S.,    134,    148,    154; 

bounties,  151,  311,  317;  British 

preference,  162. 
Finishing  industry,  59,  76,  84,  236, 

243,  306;  and  protection,  124, 304. 
Forget,  R.,  274. 
Fort  William,  226. 
Foster,  G.  E.,  bounties,  137,  154; 

tariff,  94,  97. 
Foundry  iron,  98. 
Francheville,  M.,  42. 
Frankel,  W.,  240. 
Franquet,  M.,  43. 
Eraser,  G.,  63;  letter  to  Whitney, 

203. 
Eraser,  J.  D..  229. 
Freight  rates,  10;  for  ores,  34;  for 

coal,  70;  for  iron,  174;  protection, 

93.  94. 
French  Regime,  56,  65. 
Frontenac,  42. 
Fuel,  70. 

Fund  for  iron  mining,  89,  114,  172. 
Furnace  Falls,  49,  115. 

Gananoque  Bolt  Co.,  250. 

Gananoque  Nut  Factorj',  119. 

General  Mining  Association,  coal 
mines,  56;  sold,  255,  289. 

Gentlemen's  agreements,  276. 

Geographic  factors,  8. 

German  surtax,  153. 

Germany,  3,  176. 

Gibson,  Hon.  Wm.,  280. 

Glace  Bay,  152,  211,  288. 

Graham  Nail  Co.,  253. 

Graham  Nail  Works,  combine,  246. 

Grand  Piles,  109,  226. 

Grand  Trunk  Pacific  Railway,  178, 
217. 

Grand  Trunk  Railway,  114. 

Great  Britain,  3,  43,  53;  imports 
from,  65,  68,  77,  98,  107,  153, 
164;  iron  and  steel,  65;  protec- 
tion in,  93;  tariff,  143. 

Great  Northern  Railway  of  Eng- 
land, 180. 


372 


INDEX 


Great  Village  River,  58. 
Great  Western  Railway,  54,  61. 
Greening,  P.,  61. 
Gzowski  and  Macpherson,  61. 

Halifax,  152. 
Halifax  rolling  mills,  118. 
Hamilton,  51, 61, 120, 152, 191,  299. 
Hamilton  Blast  Furnace  Co.,  89, 

90,   191;  bonused,  90,  114,  125; 

combine,  244;  formed,  101,  114; 

tariff,  300. 
Hamilton  Iron  and  Steel  Co.,  220; 

combine,  249;  tarifif,  139. 
Hamilton  Iron  Mining  Co.,  219. 
Hamilton  Steel  and  Iron  Co.,  219; 

combine,  250. 
Hamilton  Steel  and  Wire  Co.,  119. 
Harris,  Mr.,  274. 
Hastings  County,  ore,  115. 
Haycock  Iron  Mine,  48,  54. 
Helen  Mine,  31,  212,  223,  288. 
Herault,  Dr.,  316. 
Hobson,  R.,  280. 
Hodgson  Iron  and  Tube  Co.,  221; 

Montreal  rolling  mills,  250. 
Houghton,  68. 

Immigration,  16. 

Imperial  duties,  65,  162. 

Imperial  Steel  and  Wire  Co.,  237. 

Implements,  88,  133,  147.  312. 

Imports,  351;  325;  bars,  342;  coke, 
329;  Great  Britain,  65,  68,  77, 
88,  98,  107,  153,  164;  iron  and 
steel,  339;  rails,  342;  rods,  342; 
United  States,  65, 165.  See  Dump- 
ing- 
Industrial  Canada,  180. 

Industrial  development,  capital, 
14,  17;  climate,  6,  9;  coal,  14,  17; 
geographic  features,  8,  15;  iron 
and  steel  industry,  18,  322;  man- 
ufacturing, 12;  natural  resources, 
4,  20/.;  politics,  5,  7,  13;  popula- 
tion, 4,  6,  12,  16;  race,  5,  7;  tariff, 
13,  18;  transportation,  4,  6,  8,  9, 
10,  15,  17. 

Infant  industry,  319. 

Ingots,  331;  tariff,  84,  132;  imports, 
312. 

Integration,  244/.,  267,  285,  295. 

Intercolonial  Railway,  58,  62,  71, 
77,  112,  117,  216. 


Intermediate  tariff,  146. 

Investment  Trust  Co.,  269. 

Iron  and  steel,  65;  exports,  338; 

imports,  339. 
Irondale    and    Bancroft    Railway, 

116. 

Jaffray,  Hon.  R.,  116,  280. 
Jenkins  and  Hardy,  246. 
Josephine  mine,  ores,  32,  215. 

Kaministikwia  River,  229. 
Kennedy  and  Sons,  240. 
Key  Inlet,  32. 
Kingston,  61,  116. 

Labor,  conditions,  42,  72,  298,  308; 
convict,  133;  protection,  92,  133. 

Labrador  and  Ungava,  ores,  34. 

Lac  a  la  Tortue,  ores,  109. 

Lachine,  109. 

Lake  Superior  Corporation,  216, 
267,  277,  279,  281,  283;  integra- 
tion, 295. 

Lake  Superior  Iron  and  Steel  Co., 
207. 

Lake  Superior  ores,  121,  136,  288. 

Lake  Superior  Power  Co.,  216. 

Land  subsidy,  Algoma  Central 
Railway,  172. 

Laurier,  Sir  W.,  97. 

Leeds  County,  46,  49. 

Liberal  party,  bounties,  103,  126, 
131,  138,  153,  203,  317;  protec- 
tion, 16,  89,  103,  138,  155,  179, 
187;  reciprocity,  153. 

Lindsay,  116. 

Liverpool,  202. 

Localization,  242. 

London  Rolling  Mills,  253. 

London  Steel  Works,  116. 

Londonderry,  57,  60,  63,  68,  72,  94, 
120,  191;  ores,  23,  68,  288. 

Londonderry  Iron  Co.,  102,  105, 
107,  191,  223,  268. 

Londonderry  Iron  and  Mining  Co., 
224,  268. 

Louisburg,  202. 

Lyndhurst,  49,  59,  69,  72. 

Mackay,  Hon.  R.,  279,  281. 
Mackenzie  and  Mann,  32,  214,  228, 

281,  282. 
Mackenzie  River,  35. 


INDEX 


S73 


Magpie  Mine,  31,  218. 
Management,  297. 
Mann,  Sir  D.,  228,  280. 
Manufacturers,     drawbacks,     170 ; 

tariff,  134,  142,  170. 
Manufacturing,  12. 
Maritime  Nail  Co.,  246. 
Maritime  Provinces,  industry,  55 Jf. ; 

duties,  65;  ores,  25,  29. 
Market,  293,  75,  98,  78,  122. 
Marmora,  52,  68,  71. 
Marmora  Foundry  Co.,  52. 
Mason,  Col.  J.,  281. 
Mason,  J.,  50. 
Massey-Harris  Co.,  protection,  95, 

247. 
Matthews,  W.  D.,  280. 
McDonnell  Rolling  Mills  Co.,  119; 

combine,  248,  250. 
McDougall,  E.,  281. 
McDougall,  G.,  108,  122,  268. 
McDougall,  J.,  45,  48,  268. 
McDougall,  J.,  &  Co.,  119,  226. 
McGill,  Hon.  P.,  51. 
McLean,  S.  J.,  84. 
McMaster,  Hon.   Wm.,   273,  279, 

281. 
Memorials  re  tariff,  347  ff. 
Metropolitan  Rolling  Mills,  118. 
Michigan  Central  Railroad,  216. 
Michipicoten,  289,  212/.,  310. 
Midland,  33;  bonus,  171;  Canada 

Iron  Furnace  Co.,  191,  214,  222, 

273. 
Midland  Railway  and  Iron  Co.,  116. 
Migration,  inward,  16;  outward,  17; 

westward,  8. 
Mineral  Iron  Range  Mining  Co., 

223. 
Mineral  Products  Co.,  240. 
Mines  Branch,  37. 
Moffat  Irving  Steel  Works,  233. 
Moisic  Iron  Co.,  47,  68,  72. 
Molson,  Hon.  H.  M.,  281. 
Monetary  Times,  275. 
Montreal,  9,  51,  60,  109,  152. 
Montreal  Car  Wheel  Co.,  118. 
Montreal   Rolling   Mills,   60,    118; 

combined    with    Hodgson    Iron 

and  Tube  Co.,  221,  250;  Pillow- 

Hersey   Co.,   221;   Steel   Co.   of 

Canada,  220  ff.;  245,  279. 
Montreal  Steel  Works,  118, 227,  242, 

279;  combines,  268;  tariff.  146. 


Moose    Mountain,  Ltd.,  ores,  32, 

230,  271,  281. 
Moose  River,  N.S.,  55. 
Morgan,  J.  P.,  272. 
Morrow  Machine  Screw  Co.,  118. 
Moxham,  Mr.,  205. 
Mowat,  Sir  O.,  89. 

Nails,  68,  343. 

National  Policy,  begun,  13,  41,  67, 
83,  181,  308;  Buchanan,  83;  con- 
sidered, 124;  prices,  94,  124. 

Natural  resources;  see  Coal  and 
ores;  industrial  development,  4, 
20/. 

New  Brunswick,  56  ff. 

New  Brunswick  Iron  Co.,  260. 

Newfoundland  ores,  25,  29,  89,  121, 
288,  310. 

New  Glasgow,  63,  111,  120, 254, 289, 
297/,  bounties,  152;  tariff,  125. 

New  Glasgow  Coal,  Iron,  and  Rail- 
way Co.,  Ill,  112,  116,  254. 

New  Orleans,  202. 

New  York,  202. 

New  York  Central  Railway,  217. 

New  York-Nova  Scotia  Iron  and 
Coal  Mining  Co.,  56. 

Nickel  steel,  174,  212. 

Nictaux  Falls,  25,  68,  107. 

Normandale,  50,  59,  68,  71. 

North  Sydney,  152,  195. 

Northern  Iron  and  Steel  Co.,  237. 

Northern  Pacific  Iron  and  Steel 
Co.,  234. 

Nova  Scotia  Forge  Co.,  63,  77,  111, 
254. 

Nova  Scotia  Midlands  Railway, 
117. 

Nova  Scotia  Mining  Code,  173. 

Nova  Scotia  Steel  Co.,  89,  111,  118, 
194,  201,  242,  254,  279;  bonuses, 
171;  combines,  113,  120;  tariff, 
300. 

Nova  Scotia  Steel  and  Coal  Co., 
191,  194/.,  254/,  274,  276.  282, 
287;  combines,  195;  integration, 
295;  tariff,  300. 

Nova  Scotia  Steel  and  Forge  Co., 
111. 

Oliver  Iron  Mining  Co.,  271. 
Ontario,  7;  industry,  49/,  60,63; 
ores,  25.  31. 


374 


INDEX 


Ontario  Iron  and  Steel  Co.,  227, 
270. 

Ontario  Lead  and  Barb  Wire  Co., 
118. 

Ontario  Rolling  Mills,  102,  118; 
combine,  219,  245,  248,  249. 

Ontario  Tack  Co.,  245,  250. 

Ores,  328;  Antigonish,  195;  Arisaig, 
195;  Atikokan,  32;  Bale  St.  Paul, 
68;  Bathurst,  29,  225,  269;  Besse- 
mer, 24;  British  Columbia,  35, 
234;  Calgary,  271;  Cape  Breton, 
26;  Colchester  County,  25;  du- 
ties, 65,  68,  314;  exports,  338; 
Hastings  County,  115;  Haycock, 
48,  54;  Helen  Mine,  31,  212,  223, 
288;  Josephine,  32,  215;  Labra- 
dor, 34;  Lac  a  la  Tortue,  109; 
Lake  Superior,  121,  136,  288; 
Londonderry,  26,  68,  288;  Mac- 
kenzie River,  35;  Magpie,  31, 
218;  Maritime  Provinces,  25/.; 
Michipicoten,  212  /.;  289,  310; 
Moose  Mountain,  32,  371,  281, 
230;  Newfoundland,  25,  89,  121, 
288,  310;  Nictaux,  25,  55,  68, 
107;  Northwest,  91;  Ontario,  25, 
31;  Pictou  County,  26;  Quebec, 
25,  30;  Sidney  Mines,  27;  Tex- 
ada,  35,  234;  Torbrook,  25,  107, 
224;  Vancouver  Isd.,  35;  Wa- 
bana,  29,  121,  288,  310. 

Pacific  Steel  Co.,  234. 

Pearson,  Dr.  F.  S.,  217. 

Peck,  Benny  &  Co.,  60;  combine, 
246. 

Pellatt,  Col.  Sir  H.,  281. 

Pender,  J.  &  Co.,  284. 

Pictou  County,  26,  115, 116;  dump- 
ing, 207;  tariff,  160. 

Pictou  Charcoal  Iron  Co.,  117,  121, 
240;  bounties,  125. 

Pictou  Coal  and  Iron  Co.,  59,  71, 
90.  106. 

Pig  iron,  326,  330;  bounties,  85, 
88,  134,  143,  149;  consumption, 
192,  294,  309,  317;  exports,  338; 
imports,  341;  prices,  343;  pro- 
duction, 191  /.,  309. 

Pillow-Hersey  Co.,  118;  combines, 
221,  246,  250. 

Pittsburg,  201. 

Plummer,    J.    H.,   bounties,    296; 


Dominion  Steel  Co.,  210,  258, 
281;  U.S.  Steel  Co.,  211;  dump- 
ing, 181;  tariff,  315. 

Point  Edward,  198. 

Politics.  See  Conservative  Party, 
and  Liberal  Party,  5,  7,  13. 

Pools,  248. 

Population,  4,  6,  9,  75,  325. 

Port  Arthur,  32,  191. 

Port  Colborne,  235,  240. 

Port  Dover,  51. 

Port  Hope,  51,  55. 

Portland  Rolling  Mills,  62,  118; 
combine,  246. 

Potter's  Creek,  50. 

Pratt  and  Letchworth  Co.,  271. 

Preference,  British,  347,  146, 162/., 
187,  312;  Fielding,  162;  U.S.,  165. 

Prices,  13,  157,  96,  343,  353;  bar 
iron,  343;  Buffalo,  186;  Chicago, 
95;  combines,  245  /.;  see  Dump- 
ing, Ferrona,  95;  Glasgow,  95; 
iron,  68,  73,  78,  82,  94;  London- 
derry, 94;  Montreal,  94;  nails, 
343;  Philadelphia,  74, 95 ;  pig  iron, 
99;  protection,  94,  124,  157;  rails, 
343;  scrap  iron,  99,  101,  133; 
Toronto,  186. 

Protection,  begun,  67,  86;  Mr. 
Borden,  142;  bounties,  154; 
Bourassa,  Mr.,  98;  Buchanan, 
Mr.,  83;  Canadian  Manufac- 
turers' Association,  95;  Charl- 
ton, Mr.,  98;  Conservative 
Party,  16,  83,  155,  203,  312,  318, 
320;  considered,  124;  cost  of  pro- 
duction theory,  319;  finishing 
industry,  124;  freight  rates,  93; 
Great  Britain,  93;  labor,  92,  133; 
Liberal  Party,  16,  89,  103,  138, 
155,  179,  187;  Massey-Harris 
Co.,  95;  National  Policy,  134; 
prices,  94,  124;  resources,  91;  tin 
plates,  145,  147. 

Quebec,  41,  60,  63, 152;  ores,  25,  30. 
Quebec  Colonization  Act,  89. 
Quebec  Steel  Works,  49. 

Race  question,  5,  7. 
Radnor,  33,  68,  121. 
Radnor  Forges,  46,  63,  68,  71,  101, 

109,   120,   191,  226,  268;  tariff, 

125. 


INDEX 


375 


Rails,  dumping,  208;  duties,  133, 
145,  175  /.,  305;  imports,  342; 
prices,  343. 

Railway  Act,  173. 

Railways,  325;  Algoma  Central, 
172;  Canadian  Northern,  176, 
214,  228;  Canadian  Pacific,  85, 
118,  178;  Grand  Trunk,  11,  14; 
Grand  Trunk  Pacific,  178,  217; 
Great  Northern  of  England,  180; 
Great  Western,  54,  61;  Hudson's 
Bay,  34;  industrial  development, 
4,  11,  308;  Intercolonial,  15,  58, 
62,  63,  71,  77,  112,  117,  216; 
Irondale  and  Bancroft,  116;  iron 
and  steel  industry,  68,  71;  Michi- 
gan Central,  216;  New  York 
Central,  217;  Nova  Scotia  Mid- 
lands, 117;  protection,  156;  tariff, 
175  ff. 

Reciprocity,  1854,  12,  13,  66;  1911, 
18,  153,  159. 

Resources,  availability,  20^.;  Cana- 
dian, 24-38;  importance,  287; 
mining,  20^.;  ownership,  23;  pro- 
tection, 91;  proximity,  22;  trans- 
portation, 21  ^. 

Revenue,  bounties,   151  ff.;  tariff, 

67,  126,  131,  137. 
Roads,  10. 

Rods,  159;  bounties,  143  /.,  151, 
187;  Dominion  Iron  and  Steel 
Co.,  207;  duties,  66,  86,  133,  141, 
159;  imports,  342;  tariff,  286; 
U.S.  Steel  Co.,  207. 

Rogers,  Chas.,  116. 

Rolling  Mills,  120;  combine.  244/.; 
duties,  66,  84,  86,  132. 

Ross,  Jas.,  256. 

St.  Francis  River  Mining  Co.,  48. 
St.  John,  N.B.,  56,  62,  152. 
St.  John  Bolt  and  Nut  Co.,  118. 
St.  Lawrence,  Gulf,  201;  River,  6. 8, 

9. 
St.  Maurice  County,  31. 
St.  Maurice  Forges,  41  /.,  59,  63, 

68,  108,  121,  125,  308. 
St.  Paul's,  116. 

St.  Thomas,  109. 

Sandwich,  235. 

Sault  Ste.  Marie,  30,  152,  191,  212, 

288. 
Scale  of  production,  123,  294,  310; 


Dominion   Iron   and   Steel   Co., 

210. 
Scrap  iron,  duties,  66,  84,  86,  95, 

132,  314;  prices,  99,  101,  133. 
Selling  bureau,  276. 
Sheet  iron,  duties,  66,  86. 
Shields,  C,  216. 
Shipbuilding,  tariff,  84,  140. 
Siemens-Martin  process,  59,  63,  72, 

106,  107,  111,  197,  254,  292. 
Sjostedt,  M.  E.,  117. 
Smith,  v.,  52. 
Specialization,  283. 
Specific  duties,  87,  96. 
Speyer  and  Co.,  215. 
Springhill,  71,  106.  211. 
Springhill  Mining  Co.,  264. 
Springhill  and  Parsboro  Coal  and 

Railway  Co.,  264. 
Stansfield,  Dr.,  232. 
Steel,  bounties,  34, 143,  149/. ;  con- 
sumption, 143,  293/.,  310,  317; 

exports,  338;  imports,  339;  nickel 

steel,  174,  212;  production,  193/., 

242,  310;  slabs,  66,  84,  86,  132; 

structural,  141;  wrought,  66. 
Steel  and  Radiation,  Ltd.,  282. 
Steel  Co.  of    Canada  (Hamilton), 

220/.,  250/.;  integration,  295; 

tariff,  160,  191. 
Steel  Co.  of  Canada  (Londonderry). 

58,  63,  125. 
Steel  Iron  and  Railway  Works  of 

Toronto,  61. 
Stellarton,  56,  68. 
Structural  steel,  342;  bounties,  143 

/,  187. 
Subsidies,  172. 
Sydney,  27,  152,  200,  240. 
Sydnev  Lumber  Co.,  265. 
Sydney  Mines,  27, 152, 191, 255. 287. 

Tariff,  Acts,  65  /.,  84  /.,  132  /.; 
agricultural  implements,  88,  133, 
147,  312;  Canada  Iron  Furnace 
Co.,  139,  300;  Canadian  Pacific 
Railway,  85;  combines,  160, 
284/.,  315;  commission,  145, 148, 
350;  confederation,  66;  Dese- 
ronto  Iron  Co.,  139,  231,  191; 
Dominion  Iron  and  Steel  Co., 
138,  141,  148,  151,  159,  301, 
Great  Britain,  143;  Hamilton 
Iron  and  Steel  Co.,  139;  indus- 


;76 


INDEX 


trial  development,  13,  18;  inter- 
mediate, 146;  manufacturers,  134, 
142;  memorials,  347  jf.;  Mon- 
treal Steel  Works,  146;  Nova 
Scotia  Steel  Co.,  138,  142,  300; 
Pender,  J.,  &  Co.,  160;  Plummer, 
J.  H.,  315;  Radnor  Forges,  125; 
railways,  175j^.;  revenue,  67,  126, 
131,  137;  rolling  mills,  304;  ship- 
building, 84,  140;  Steel  Co.,  of 
Canada,  160,  191;  tin  plate,  238; 
wire  rods,  286. 

Territories,  N.W.,  91. 

Texada  Isd.,  35,  234. 

Three  Rivers,  41,  44,  108. 

Tilley,  Sir  L.,  tariff,  90. 

Tin  plate,  protection,  145;  tariff, 
238. 

Torbrook,  25,  107,  224. 

Torbrook  Iron  Co.,  107. 

Toronto,51,54,61, 192,231,116, 152. 

Toronto  Bolt  and  Forging  Co.,  250. 

Toronto  Wire  and  Iron  Works,  60. 

Trade,  aggregate,  13,  16,  18,  325; 
balance,  91,  97,  104;  exports,  18; 
339/.;  imports,  18,  339/. 

Transportation,  21  /.;  see  Canals, 
Roads,  Railways;  industrial  de- 
velopment, 4,  6,  8,  9,  10,  15,  17. 

Transvaal,  180. 

Trenton,  63,  111,  120, 195,  251,  299. 

Trusts,  244  jf. 

Tupper,  Sir  Chas.,  91;  bounties, 
140,  154,  203. 

United  Empire  Loyalists,  12. 
United  States,  3,  4,  5,  60,  121;  im- 


ports from,  65,  165;  iron  indus- 
try, 192;  market,  75,  96, 141,  159, 
206/.;  preference,  165;  tariff,  47, 
74,  86,  93,  137,  200. 
United  States  Steel  Corporation, 
141,  146,  211,  235,  244,  251,  283; 
bounties,  150,  302;  dumping, 
177,  185,  207,  244;  wire  rods, 
207. 

Vancouver  Engineering  Works,  234. 
Vancouver  Isd.,  35. 
Van  Home,  Sir  W.  E.,  281. 
Van  Norman,  J.,  50,  51,  53. 
Victoria  Iron  Works,  60. 

Wabana   mine,    9,    121,  195,  200, 

288,  310. 
Welland,  192,  227. 
Welland  Canal,  50. 
White,  W.  T.,  159,  312,  313. 
Whitney,  W.  H.,  140,  200,  203,  257, 

273. 
Whycocomagh,  26. 
Wilbur,  33. 
Willcox,  C.  S.,  280. 
Wilson,  J.  R.,  118,  279,  281;  U.S. 

Steel  Co.,  211. 
Wire,  duties,  84,  145,  305. 
Wire  rods,  286;  bounties,  334. 
Wood,  E.  R.,  281. 
Woodall,  W.  H.,  246. 
Woodstock,      Charlotte     County, 

N.B.,  29,  52,  56,  68,  72,  107. 
Woodstock  Charcoal  Iron  Co.,  57. 
Wrought  scrap  iron,  341. 
Wrought  steel,  66. 


CAMBRIDGE  .  MASSACHUSETTS 
U    .    S    .   A 


This  book  is  DUE  on  the  last  date  stamped  below 


MAR  U  1933 


Iff? 


9     1S3» 


29  193^ 


MAR  1  0  1937 


30  I960 
^^B2    1969 


Form  L.-Q-15ni-7,'31 


,^«;«f 


E5s  ANG' 


UCLA-Young   Research   Library 

HD9524.C1    D7 

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L  009   516   374  7 


